Information technology solutions provider Hartco Inc. is selling its franchise network MicroAge to TMN Systems in order to concentrate its efforts on the commercial segment of its business.
Details of the sale, which is expected to close close on June 30, 2014, were not immediately released.
A statement from Hartco said the company plans to use the net proceeds of this transaction to increase its financial flexibility. Hartco will continue to review strategic options with the goal of maximizing shareholder value.
“The sale of Hartco’s franchising segment is a result of the strategic review process that we announced earlier this year and we are delighted that the MicroAge franchise network will have the opportunity to prosper under new ownership,” Pat Waid, president and chief operating officer of Hartco said in a statement. “The sale of our franchising segment increases our focus on successfully operating our commercial segment and we will continue to adapt our business model in response to emerging market trends.”
Hartco reported revenues of $63 million and a net loss of $1.02 million for the first quarter of its 2014 fiscal year. The results were lower than those reported for the corresponding previous financial of the business.
The financial results for the last fiscal quarter completed at Hartco, or the first quarter of its 2014 fiscal year , Hartco had reported revenues of $ 63 million and a net loss of $ 1.02 million.
These results were lower than those that were recorded for the corresponding previous financial year of the business quarter.
However TMN expressed confidence in the prospects of MicroAge.
“The MicroAge franchise network is an attractive business with great potential and we believe that it will thrive in the future,” said Brad Hoffman, general manager of TMN. “With more than thirty five locations across Canada, the MicroAge network is a national network of independently owned IT solution providers with longstanding customer relationships based on an unrelenting commitment to service excellence.”
Last year, after more than 35 years running a distribution business, Hartco has decided to focus on its franchising business exclusively.
Through an outsourcing partnership with Mississauga, Ont.-based Tech Data Canada, Hartco has handed over the distribution of products for its franchises mainly MicroAge and Metafore to the broadline distributor.