The investor group is led by Gary Wilson, chairman of Northwest Airlines; Jerome York, a former IBM chief financial officer; and investment firm Freeman Spogli.
Norwalk, Conn.-based Micro Warehouse has recently seen its stock hover around a 52-week low, with intensified competition from CDW Computer Centers and other direct marketers. Shares of Micro Warehouse closed yesterday at 15.25, and traded as low as 11.31 and as high as 47 during the past 52 weeks.
Under the terms of the deal, Micro Warehouse shareholders will receive $19 in cash for each share, representing a 44 percent premium on the company's average stock price over the past 30 days. The acquisition is expected to be completed by the end of January.
Credit Suisse First Boston and CIBC World Markets will fund $320 million in senior debt financing at the closing of the transaction.
Other investors in the deal include Alfred Checchi and entertainment mogul Michael Ovitz.
York has been tapped to succeed Micro Warehouse co-founder Peter Godfrey as chairman and chief executive. York has also served on the board of directors at Apple Computer since 1997.
"Although the company faces significant challenges, I am very impressed with Micro Warehouse's strong operating management, talented work force and good customer relationships," York said in a statement.
Upon completion of the merger, which is subject to customary closing conditions, a new seven-member board of directors will be set up for Micro Warehouse, including York, Wilson, Boyer, Checchi and three representatives of Freeman Spogli.
Computer sellers in general have had their backs against the wall, not just from stiff competition against each other, but also from falling margins.
Consolidation and retail upheaval continues in the PC sector. Online computer products retailer Egghead.com, for example, recently merged with Onsale.com to compete more efficiently against Amazon.com.
Meanwhile some leading PC makers, including Compaq Computer, are slowly moving from indirect sales to direct sales, cutting out the distributors. Just last week, distributor Inacom laid off 1,000 employees, as it struggles with changes in distribution channels.