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Electrograph Systems Acquires International Computer Graphics; Transaction Further Strengthens Electrograph's Position As a Leading National Value-Added Distributor of Display Technology Solutions

Posted on: Monday, 19 June 2006, 15:00 CDT

Electrograph Systems, Inc., a leading national value-added distributor of display technology solutions to the professional, commercial and high-end consumer markets, today announced that it has acquired International Computer Graphics, Inc. (ICG), of City of Industry, Calif., one of North America's top specialty distributors of LCD, plasma and desktop displays, digital imaging peripherals and AV presentation products. The financial terms of the transaction were not disclosed.

The acquisition of ICG roughly doubles Electrograph's revenues to more than $550 million annually and greatly strengthens its presence on the West Coast while enhancing its overall logistical presence across the United States. The companies combined have over 45 years in business as distribution leaders, with 16 sales offices and 10 distribution centers across the U.S. The transaction is Electrograph's third strategic acquisition since it was acquired in August 2005 by Caxton-Iseman Capital, Inc. in partnership with Alan Marc Smith, Electrograph's Chief Executive Officer, and Sam Taylor, its President. In February 2006, Electrograph acquired ActiveLight, a leading value-added distributor of display technology solutions to the professional, commercial and high-end consumer markets; and CineLight, a leading, value-added distributor of advanced display technology products and accessories to home theater designers and resellers.

Mr. Smith said: "I am extremely excited about the acquisition of ICG. Strategically, the deal is a home run; just eleven months ago Electrograph was a $160 million (revenue) company and this moves us significantly closer to our goal of being a billion-dollar distributor. We don't look at this deal as a consolidation but as an accretive acquisition. ICG brings Electrograph a new customer base, a strong presence in the IT market, and additional product lines. Further, ICG has a highly efficient infrastructure, additional warehouses and, most importantly, a wealth of talent in its people. We will also have a better platform from which to address our future growth potential and value-creation opportunities. ICG brings us a critical leg in the foundation we are building and further drives our stake in the ground as a premier display technology distributor in the United States."

Robert A. Ferris, a Managing Director of Caxton-Iseman, said: "The acquisition of ICG by Electrograph is an important part of the plan to substantially grow this business. We look forward to continuing our work with the expanded management team at Electrograph to capitalize on more growth and acquisition opportunities."

As part of the acquisition, the three executive members of the ICG management team have purchased an equity stake in company and will become part of the Electrograph management team, including ICG founder Mike Ahmar, who has been named Electrograph's Chief Operating Officer. In addition, Robbie Chikhani has been named Senior Vice President - National Accounts and David Thompson has been named Electrograph's Chief Information Officer. Frank Lincks will continue to serve as the company's Chief Financial Officer.

Mr. Smith continued: "Part of our goal is not only to acquire companies that meet our strategic objectives, but also to obtain the human talent required to deliver the best practices in our industry. Mike Ahmar, David Thompson and Robbie Chikahni are industry veterans and key additions to our management team. At the end of the day, the distribution business is all about people; and ICG's management and employees are an outstanding addition to the Electrograph team. The new Electrograph is now clearly one of the leaders in our current markets and we plan to further expand our presence in industries such as consumer electronics, security and wireless."

Mike Ahmar, Electrograph's new Chief Operating Officer, said: "We are delighted to join with Electrograph to leverage the size and scope of the combined enterprise. We believe that together we can further expand Electrograph's value for our customers, business partners, colleagues and investors. We clearly see the synergy between the two companies. Further, we see those synergies quickly emerging as we combine our best practices with Electrograph to become a stronger, more complete display solutions provider for our customers."

ICG's resellers support commercial and consumer technology markets, including IT, Digital Signage, Healthcare, Financial, Retail POS, and other growing vertical markets. ICG has strategic partnerships with such leading manufacturers as NEC, Sony, Viewsonic, Pioneer, Panasonic, Samsung, Epson, Toshiba, Philips, InFocus, Sharp, LG, and others.

Mr. Smith concluded: "Electrograph plans to continue growing both organically and through strategic acquisitions. The ICG acquisition is a major milestone in our strategic plan for expansion and I am comfortable in saying there is more to come."

About Electrograph Systems, Inc.

Founded in 1982, Electrograph Systems, Inc. is a leading national distributor of display technology solutions, including plasma displays, LCD displays, LCD and DLP(TM) projectors, and rear screen projection TV's. With nine regional offices and a network of more than 4,000 reseller partners and integrators, Electrograph is the one of the largest plasma display distributor in the U.S. and is the only distributor to operate a certified ICIA nationwide sales and service network. The company specializes in display, audio, connectivity and other complementary technologies for the professional audio/video, high-end consumer and commercial industries. For more information, visit the company's website at www.electrograph.com.

About International Computer Graphics, Inc.

International Computer Graphics, Inc. (ICG) is headquartered in City of Industry, CA (Los Angeles region). The company was founded in 1985 by Mike Ahmar, as a value-added distributor of graphics peripherals for the CAD market and has evolved into a leading specialty distributors of desktop displays, A/V presentation products and digital imaging peripherals in the United States. Initially located in San Jose, Calif., ICG now operates seven full-service centers across the United States, with two in California and one each in Washington, Texas, Illinois, Ohio and New Jersey. Each regional distribution hub has a sales center with outbound account managers and a technical sales team.

About Caxton-Iseman Capital, Inc.

Caxton-Iseman Capital, Inc. is a New York-based private equity firm. In addition to Electrograph, its portfolio companies include Ply Gem Industries, Inc., a manufacturer of vinyl building products; Buffets Inc., the leading owner and operator of buffet-style restaurants; and Meritain Health, a third-party administrator of health care plans providing medical management and cost management services for employers, insurers, HMOs and other TPAs. Caxton-Iseman's investment vehicles have available capital in excess of $2 billion.

Electrograph Systems is a registered trademark of Electrograph Systems, Inc. in the USA. All other brand names, product names or trademarks belong to their respective holders.

Source: Business Wire

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