Sydney-based electronics retailer DigiDirect has formally acquired the beleaguered IT and gaming business Mwave, taking over core assets for $520,000 while creditors remain owed nearly $18 million.

Newly revealed documents detail a turbulent lead-up to the deal, driven by financial distress and last-ditch efforts by former CEO Victor Lee. seen below.

According to leaked materials obtained by ChannelNews, DigiDirect first expressed interest in acquiring Mwave nearly four years ago, during Lee’s early struggles with capital flow.

Facing mounting pressure from funders, Lee proposed a rescue plan in late May 2025, aiming to preserve both the business and the jobs of permanent and casual staff. The private equity funder, who had held full ownership since January 2021, agreed to sell all company shares back to Lee.

Just days later, on 12 June 2025, Mwave’s core business assets—including its brand, customer database, and goodwill—were sold to DigiDirect for $520,000.

Of that, $120,000 covered plant and equipment, while $400,000 was paid for intangible assets. Stock was notably excluded from this transaction.

Within 24 hours of the sale, Mwave entered voluntary administration.

Unwinding the Stock and Debt Trail

Administrator DVT McLeod reported that $500,000 of the sale proceeds were used to discharge registered securities via Pelorus Capital. DigiDirect then separately negotiated with administrators to buy unsecured stock valued at $535,193 (inclusive of GST) on an “as is, where is” basis. The administrators accepted the offer to avoid relocation costs and agent commissions, citing a fair valuation.

At the time of administration, company records showed:
– Outstanding receivables of $478,912, with $239,181 recovered to date.
– Distributor rebates totalling approximately $685,582, though much is unlikely to be recouped due to unpaid supplier offsets.
– Stock inventory of around 70,000 items, reportedly worth $3.9 million.

Roughly $2.5 million of stock remains entangled in secured claims.

These items have been quarantined at Mwave’s Lidcombe warehouse to allow inspection by secured creditors. DigiDirect has offered to purchase verified secured stock at full cost, a gesture administrators say may represent the best outcome for all parties.

Strategic Missteps and Recovery Attempts

Mwave’s decline traces back to 2021, when its private equity owner appointed a new board, CEO, and CFO—none of whom had operational experience in tech retail. Administrators say mismanagement led to millions in losses and excessive dividend payouts that drained the company’s cash reserves.

Despite later recovery efforts—such as rising monthly sales by $1.5 million and cutting operating costs by $42,000 in mid-2024—the company remained undercapitalised. By early 2025, PayPal’s withholding policy, combined with reduced distributor credit, constrained Mwave’s ability to source high-demand inventory, further eroding market share.

In May 2025, Lee learned the equity funder had approached DigiDirect to negotiate a potential sale, echoing earlier outreach made in 2021. After DigiDirect rejected that offer, Lee initiated his own direct negotiations.

On 5 June, he reacquired company shares from the equity funder, only to sell the business days later under a conditional agreement.