Stonepath Group Enters Definitive Agreement to Sell U.S.-Based International Services Unit
07 September 2006 - 8:24AM
PR Newswire (US)
SEATTLE, Sept. 6 /PRNewswire-FirstCall/ -- Stonepath Group, Inc.
(AMEX:STG) ("Stonepath"), the logistics services organization,
announced today that it has entered into a definitive agreement
with JTM Acquisition Corporation ("JTM") for the sale of Stonepath
Logistics International Services, Inc. ("SLIS"), for aggregate
consideration of $17.9 million, consisting of a closing cash
payment of $12.2 million and the assumption or satisfaction by JTM
of certain liabilities associated with SLIS. Stonepath expects to
sign an additional agreement with JTM to sell its Stonepath
Logistics (Germany) GmbH subsidiary for $100,000, raising the total
consideration of the transactions to $18.0 million. JTM is backed
by private equity fund ComVest Investment Partners. The Company
expects to recognize a book loss on the sale of SLIS and its German
subsidiary of approximately $3.5 million. SLIS, which was acquired
by Stonepath in 2002, is Stonepath's North American-based logistics
business that provides international air and ocean logistics
services and includes Global Container Line, Inc. Stonepath Group's
offshore subsidiaries, including those in Asia, will remain intact.
"I am pleased to share this important first step toward reducing
Stonepath's outstanding liabilities," said Bob Arovas, Stonepath's
Interim CEO. "This sale will substantially reduce Stonepath's debt
obligations. We continue to look at opportunities to restructure
our business to achieve profitable future operations. This will
require the continuing support of our loyal customers, vendors,
lenders and of course, our dedicated employees." Arovas continued,
"We have weathered a great deal of adversity in Stonepath's initial
years. Although some difficulties are behind us, there are
continued challenges ahead. We intend to focus on competition on
the basis of service and price and to continue to see that our
customers receive excellent service, a hallmark on which Stonepath
was founded. To drive growth and efficiency, we also plan on
strategically expanding our sales force and making further
improvements to our systems. Our primary concern is the profitable
growth of our business, both within and outside the U.S. We will
share our progress through press releases and quarterly conference
calls, the latter commencing with the third quarter results for
2006." The founder and President of JTM is Jason F. Totah, who
served as Stonepath's Chief Executive Officer from October 2004
until July 20, 2006, when he temporarily resigned his position as
Chief Executive Office, until either the sale is consummated, at
which point it is contemplated that he will formally resign his
position with Stonepath, or the sale is abandoned, at which point
it is contemplated that he would resume his position with
Stonepath. Consummation of the sale is subject to conditions
including, without limitation, the receipt of funding by JTM's
contemplated source of financing for the sale, receipt by JTM and
Stonepath of applicable consents, approvals and releases, and the
receipt by Stonepath's Board of Directors of a fairness opinion
from a valuation advisor as to the purchase price to be received in
the sale. Subject to satisfaction or waiver of the conditions to
consummation of the sale contained in the Purchase Agreement, the
parties anticipate that the sale will close on or before October
16, 2006. About ComVest Investment Partners The ComVest Group is a
Leading Private Equity Firm focused on investing in middle-market
companies. Since 1988 ComVest has invested more than $2 billion of
equity capital in over 200 public and private companies world wide.
Through the firm's extensive financial resources and broad network
of industry experts, the firm is able to offer its portfolio
companies total financial sponsorship, critical strategic support,
and business development assistance. The firm has offices in West
Palm Beach, Florida and New York City, New York
(http://www.comvest.com/). About Stonepath Group (AMEX:STG)
Stonepath (www.stonepath.com) is a global, third-party logistics
organization providing a full range of transportation and
distribution solutions to multinational and local businesses
including a diverse client mix of retail leaders, automotive and
technology concerns, government agencies, and defense contractors.
This Press Release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
regarding future events and plans. We have based these
forward-looking statements on our current expectations and
projections about such future events and plans. These
forward-looking statements are not guarantees and are subject to
known and unknown risks, uncertainties and assumptions about us
that may cause our actual events and plans to be materially
different from any future events and plans expressed or implied by
such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "guidance,"
"may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "estimate," "continue" or the negative of
such terms or other similar expressions. Although it is impossible
to identify all of the factors that may cause our actual events and
plans to differ materially from those set forth in such
forward-looking statements, such factors include the inherent risks
associated with any significant business transaction, including the
ability to satisfy both parties' conditions to consummation of such
a transaction. Risk factors that are relevant to an analysis of our
business generally include, but are not limited to, those factors
identified in our Securities and Exchange Commission filings
(including our Annual Report on Form 10-K for 2005), other public
documents and recent press releases, which can be found on our
corporate web site, www.stonepath.com. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date made. We undertake no obligation to publicly
release the result of any revision of these forward-looking
statements to reflect events or circumstances after the date they
are made or to reflect the occurrence of unanticipated events.
DATASOURCE: Stonepath Group, Inc. CONTACT: John Brine,
+1-212-254-8280 Web site: http://www.stonepath.com/
http://www.comvest.com/
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