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Waltham-based ModusLink Global Solutions Inc. (Nasdaq: MLNK) has acquired Tech for Less LLC, a Colorado-based company that buys and re-sells surplus consumer technology products, for $30 million in cash.
ModusLink, formerly CMGI Inc., expects to pay an additional performance-based consideration of up to $10 million if Tech for Less meets milestones in 2010.
ModusLink, a provider of global supply chain management services, reported $1.01 billion in revenue in its 2009 fiscal year, which ended July 31. In its 2009 end-of-year report, the company posted an operating loss of $167.7 million and noted its prospects for future operating profitability are uncertain.
The company attributed part of the loss to impairment of investments made by its venture-capital arm, @Ventures. As CMGI, the company was known for savvy investments in various technology areas. In 2008, the company took the name of ModusLink, a company it had acquired in 2004, and narrowed its focus to supply chain management.
ModusLink expects the transaction to be neutral to earnings in its fiscal 2010 and boost its cash flow for the year, according to its press release. By 2011, the company expects Tech for Less will add to both cash flow and earnings.
It’s at least the second such purchase in the past two years for ModusLink, which bought Indiana-based PTS Electronics, a consumer-electronics service repair and reverse logistics provider, for $45 million in May, 2008.
Colorado Springs-based Tech for Less buys returned and surplus technology products from retailers, distributors and manufacturers, tests and repairs it, and re-sells it on its proprietary website and other channels, according to ModusLink’s press release.
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