MCSi to purchase Zengine for 7.02 times revenue

The Deal: MCSi Inc. has agreed to purchase the rest of Zengine Inc., that it does not already own, for $3.43 a share. The deal values Zengine at $59 million. MCSi already owns 58.5 percent of Zengine and plans to reduce its operations immediately after the acquisition.

Discussion: Zengine offers outsourced software and services to help businesses rapidly implement and conduct electronic commerce. Its services include Web site user interface design, product content and merchandising, customer relationship management, order management and fulfillment and inventory management, among others. Customers include MCSi, Hitachi America and Sharp Electronics. Zengine was spun off from MCSi in 2000.

MCSi, formerly known as Miami Computer Supply, is a distributor of computer and office automation supplies to small and mid-sized businesses. The company sells audiovisual equipment and offers products from about 500 manufacturers, including Hewlett-Packard, Lexmark, Canon and Sony. Products range from laser and copier toner, fax machine supplies, and diskettes to projection and presentation hardware, videoconferencing equipment and workstation accessories. MCSi's customers include businesses, governments and institutions throughout the United States and Canada. MCSi also offers services such as project design and equipment maintenance.

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