Waxie Maxie Quality Music Co., the Washington area record-store chain whose history spans the era from the 78 rpm record to the compact disc, agreed yesterday to be taken over by Live Entertainment Inc., a fast-growing, audio-video entertainment distribution conglomerate based in Los Angeles. Live Entertainment will pay $11.7 million -- $20.90 a share, or about triple the most recent market quotation for the stock -- for closely held Waxie Maxie, which has 33 stores in the Washington suburbs and as far north as Baltimore and plans to open its 34th store next week in Warrenton, Va. The company had sales of $23.9 million in the fiscal year ended July 31. The acquisition gives Live Entertainment a string of record stores up and down the East Coast, adding to its Milford, Mass.-based Strawberries chain, which has branches as far south as Wilmington, Del. "This was a natural geographic fit," said Roger R. Smith, executive vice president and chief financial officer of Live. "We have staked out our retail territory as sort of the Eastern Seaboard from Maine to Virginia," although the company has kept out of the hotly competitive New York area. Smith said Waxie Maxie was attractive as a takeover target because "it has a very, very strong presence in a major market ... and our belief about music retailing and, in fact, general entertainment software, is that regional strength is key to the business." The company hopes to expand Waxie Maxie outside the Washington suburbs into Richmond and other parts of Virginia, Smith said. The stores will keep the Waxie Maxie name and much of the same management after the takeover, Smith said, though some distribution and data processing operations will be consolidated with Strawberries operations. Waxie Maxie's headquarters will remain in the District. Mark Silverman, president of Waxie Maxie, said his family, which owns 60 percent of the company's stock, decided to accept Live's offer because "the deal was right." Silverman, whose father, Max, founded the company and gave it its name in 1938, said the decision to sell was unconnected with the recent death of the elder Silverman. Sid Wachtel, chairman of Wachtel & Co., a local brokerage that handled Waxie Maxie's initial stock offering in 1970, and whose family owns a significant stake in the company's stock, said Waxie Maxie has been seeking financial backing for further expansion for some time. Last year, the firm briefly was in negotiations for a merger with a Pittsburgh-based record retailer. Wachtel said the takeover price "seems very fair to stockholders, many of whom have been holding their shares since the original underwriting." Waxie Maxie's stock trades extremely infrequently; the most recent over-the-counter bid price for the stock was $7 a share. The competitive local record retailing business includes a variety of national and local players. Waxie Maxie's biggest locally based competitor is similarly sized Kemp Mill Records, whose vice president, Howard Applebaum, said yesterday it was too early to try to assess the effect of the takeover of Waxie Maxie. "It should play out pretty interesting," Applebaum said. Applebaum noted that Waxie Maxie, like its new corporate partner Strawberries, does not discount its merchandise as heavily as Kemp Mill does, but Smith said, "One of the great strengths of Waxie is the image they have in area that has been carefully built up ... as the music specialist. They really know the product. They're not in it for a quick buck." Live Entertainment was founded in 1986 as the parent of International Video Entertainment, a large independent distributor of videotapes including such films as "Rambo III" and "Red Heat" and such children's fare as the "Teenage Mutant Ninja Turtles" video. The company also owns Lieberman Enterprises, a "rack jobber" that manages and supplies record departments at such mass-market retailers as Wal-Mart, Bradlee's and Ames discount stores. Last summer, Live Entertainment acquired Strawberries, which the company saw as a natural fit to its other businesses as record stores have expanded to sell other media such as videocassettes and computer software. "All of this basically fits together as an integrated audio and video distribution and retailing company," Smith said. Live Entertainment -- which had profit of $12.3 million on sales of $99.3 million in the third quarter ended Sept. 30 -- gained some unwanted publicity in August when its chairman, Jose Menendez, and his wife were shot to death in their Beverly Hills home. The company denied speculation that the killings were related to organized crime, and Los Angeles police have yet to come up with suspects or a motive in the murders. A new chairman has not been selected, although Live Entertainment last week named a longtime company executive, Devendra Mishra, as president and chief operating officer.