Terms of the deal were not disclosed but Platinum Equity and the Gores Group, which financed the acquisition, acquired Alliance in September 2010 with the intention of buying up wholesalers as the industry consolidates due to shrinking CD and DVD sales. Platinum Equity and Gores Group are private equity investment firms that look for opportunities in troubled industries.
Platinum Equity has had a busy month. According to press reports, Platinum is also one of the bidders for the Warner Music Group, and some sources suggest the Gores Group is also involved in that bid.
Meanwhile, Billboard estimates EDGE has annual revenues of about $35 million. The deal should help Alliance maintain its annual revenue base at about $750 million, Billboard estimates.
"As the market for distributing media content continues to evolve, we will keep pursuing opportunities to grow and diversify Alliance's business organically and through additional acquisitions," Platinum Equity president of portfolio operations Bryan Kelln said in a statement.
The sale by EDGE owners comes two years after the Streetsboro, Ohio-based company merged with Galaxy One-Stop. At that time, Billboard estimated EDGE's annual revenue base at $50 million.
According to the announcement, EDGE's inventory comprises more than 140,000 titles of compact discs, DVD and Blu-Ray movies, and other entertainment-related accessory products. Over this month, EDGE inventory and product shipments to stores will transition to Alliance's Sheperdsville, Ky. distribution center, which carries about 400,000 CD, DVD and video game titles.
While Alliance is hiring the EDGE sales staff, which is a team of about 12, the other estimated 60 or so EDGE employees will be let go in increments during this period, although some of them may find a home in EDGE owner Harry Singer's other business, sundries distribution, sources say.
Singer was not immediately available for comment, while Alliance president/CEO Alan Tuchman was unavailable for comment.