Best Products Co. Inc., a major catalogue showroom merchandiser based in Richmond, has agreed to acquire Basco Inc., a similar company based in Cherry Hill, N.J.
Under the agreement, each share of Basco common would be converted into 0.0333 share of Best Products common, and Basco would have a contingent right to receive an additional 0.0833 share one year after the merger.
Best Products said it has entered into option agreements with holders of 35 percent of Basco's common stock, giving the Richmond-based company the right to acquire those shares.
Basco has 973,367 shares of common stock outstanding.
Approval of the transaction is required by Basco's shareholders. A spokesman for Best Products said arrangements must also be made with holders of Basco debentures.
Meanwhile, Best Products has agreed, subject to certain conditions, to purchase some Basco assets if the merger isn't completed. Best Products would be interested in acquiring some of Basco's more profitable sales units in the absence of a merger, a spokesman for the Richmond company indicated.
Basco, which is a major regional catalog showroom merchandiser, experienced losses in the fiscal year ended June 30 as well as in the first quarter of the current fiscal year.
Founded in 1954, Basco operates 19 sales units in Maryland, Virginia, Pennsylvania, Delaware, New Jersey and Ohio.
Best Products operates 100 showrooms in 11 states, including 10 in the Washington-Baltimore market. It reported net income of $24.3 million and sales of $1 billion for the fiscal year that ended June 27.