Tandy Pays $75m for AmeriLink and Home Connectivity Push

Computergram International, May 24, 1999

Electronics retailing giant Tandy Corp has struck a deal to acquire AmeriLink Corp for $75m in an all stock transaction. Columbus, Ohio-based AmeriLink designs and installs cabling systems for video, voice and data transmission to home users. The deal comes as part of a push by Fort Worth, Texas-based Tandy to offer in-home installation services through its chain of Radio Shack stores. The logic behind the move is that Radio Shack customers will now have a one-stop shop for the purchase, set-up and maintenance of digital subscriber line services, digital cable and satellite TV and cable modems. Tandy says it plans to offer installation services in about half of its 7,000 stores by the end of the calendar year.

The terms of the deal call for Tandy to acquire all of AmeriLink's common stock at a fixed exchange ratio of $15.60 per share in a tax-free exchange for Tandy stock. The price represents a 43% premium over AmeriLink's Thursday closing price of $10.875. AmeriLink offers it services nationwide, with 10 to 15 thousand installations weekly, and is said to be consistently profitable. For the year ended March 31, it booked net income of $1.3m on revenue of $65.2m and generated operating cash flow of $5.7m. Tandy says the acquisition, which is not expected to be dilutive to earnings, should close in late August.