Audio Video News

Audio and video retailer Tweeter Home Entertainment Group announced last week that it has reached an agreement in principle to acquire Big Screen City, located in the greater San Diego and Temecula, CA areas. Big Screen City is a four-store specialty consumer electronics retailer with annual sales over $15 million, and has been in business in the San Diego market for 20 years. The companies say that they expect to complete the transaction on or about May 1, 2001.

Tweeter says it will pay approximately $4 million in cash and $1 million in stock for all of the outstanding common stock of The Video Scene, which operates Big Screen City. The company adds that it intends to issue these shares from its shelf registration filed on April 13, 1999 and amended on December 23, 1999. The transaction will be accounted a purchase.

Tweeter's Jeffrey Stone expects that the purchase will strengthen his company's presence in the San Diego market, stating, "Big Screen City currently does 66% of its business in television products with 57% of the business being done in projection television. They play a major role in this market, with over 80% of their projection television sales dedicated to high-definition and high-definition–ready sets. A growing percentage of their business requires home installation services, as they have paid particular attention to the sale of custom furniture and home theater products."

According to Stone, "Later this spring/early summer, we will open one new store in San Diego and relocate three of our existing Tweeter stores. We will also open a new store in Riverside and will be changing the name of Big Screen City to Tweeter during the month of May. Bob Souter, Big Screen City's founder, will remain with the company at least through the end of the year to assist with the merger."

Tweeter started the year with 90 stores, having added 8 stores through acquisitions to date, including 4 Douglas TV stores in October, in addition to Big Screen City. The company says that it expects to end fiscal 2001 with 115 stores, or approximately 30% storefront growth.