FENX Fenix Parts, Inc.

Fenix Parts, Inc. (Pink Sheets:FENX), a leading recycler and reseller of original equipment manufacturer (“OEM”) automotive products (the “Company”), today announced that it has entered into a definitive merger agreement with Stellex Capital Management LP (“Stellex”) under which a Stellex-controlled affiliate would acquire the Company for $0.40 per share in cash along with the assumption of over $40 million in operating and long-term liabilities, including $33 million of indebtedness. The per share cash consideration under the merger, which has been unanimously approved by the Company’s Board of Directors, represents a premium of approximately 56% to the 60-day volume-weighted average stock price as of February 9, 2018, the last trading day prior to the announcement by Upstate Shredding, LLC of an unsolicited, non-binding offer for the Company. The merger agreement is subject to shareholder approval, and a proxy statement will be mailed to shareholders shortly. The proxy statement and proxy card, as well as additional information about the transaction, will be accessible on the Company’s website when it becomes available. The deal is expected to close in the second quarter of 2018.

Kent Robertson, CEO of the Company, commented, “We are pleased to announce this definitive merger agreement with Stellex following a long and exhaustive strategic review process, which included multiple offers from both strategic and financial entities that ultimately fell apart. Throughout this process, the Company’s financial condition has continued to deteriorate due to ongoing liquidity constraints which limited the Company’s car buying activity and the impact of a fire in April 2017 at our Toronto facility. As a result of continued negative cash flow from operations and the current liquidity situation, including the continuing default on our senior secured credit facility, there was significant doubt that the company could remain a going concern, limiting our options to move forward with the business. Due to all of these factors, the Board believes this offer from Stellex represents the best opportunity for shareholders to maximize value.”

On February 13, 2018, the Company announced that it had received an unsolicited, non-binding offer to acquire the Company. After careful consideration, the Board concluded that there was significant doubt that the offer would be completed on its announced terms.  The Board also observed that pursuing the offer, and the related lengthy due diligence process that would ensue, would jeopardize the advanced negotiations with Stellex. Comparatively, the Stellex offer followed months of extensive negotiation and due diligence, giving the Board confidence that the proposed transaction with Stellex provided a better alternative for stockholders to monetize their shares and will facilitate the Company entering into an extension to its forbearance agreement with its senior secured lender, which is expected to be executed later today.

In March 2017, the Company announced that it had engaged Stifel to advise the Board and the Company management and to assist in pursuing a range of potential strategic and financial transactions to provide the Company with improved liquidity and maximize shareholder value.

Stifel is acting as financial advisor to the Company and Duff & Phelps LLC rendered a fairness opinion to the Board of Directors.  Johnson & Colmar is acting as legal counsel to the Company and Mayer Brown LLP provided legal advice to the special committee of the Company’s Board of Directors. Dentons US LLP is serving as legal counsel to Stellex.

Board of Directors UpdateThe Company announced the resignation of two members of its Board of Directors. Thomas O’Brien, a Director and member of the Compensation and Nominating and Corporate Governance Committees, stepped down from the Board on February 27, 2018 due to a potential conflict related to his pending acceptance of a Board position at an industry-related company. Mr. O’Brien voted in favor of the merger agreement prior to his resignation. In addition, Clayton Trier, a member of the Compensation Committee and head of the Audit Committee, tendered his resignation on February 25, 2018 for personal reasons.

About Fenix PartsFenix Parts, Inc. is a leading recycler and reseller of original equipment manufacturer (“OEM”) automotive products.  The company’s primary business is auto recycling, which is the recovery and resale of OEM parts, components and systems reclaimed from damaged, totaled or low value vehicles.  Customers include collision repair shops (body shops), mechanical repair shops, auto dealerships and individual retail customers. Fenix provides its customers with high-quality recycled OEM products, extensive inventory and product availability, responsive customer service and fast delivery.

Fenix was founded in 2014 to create a network that offers sales, fulfillment and distribution in key regional markets in the United States and Canada.  The Fenix companies have been in business an average of more than 25 years and currently operate from 16 locations throughout the Eastern U.S. and in Ontario, Canada.

Forward-Looking StatementsStatements in this press release regarding the proposed transaction between Stellex and Fenix, the expected timetable for completing the transaction, benefits of the transaction and any other statements about Stellex and Fenix managements’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates,” and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the ability to consummate the transaction. Except as otherwise required by law, Fenix disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

At Fenix Parts:Scott PettitChief Financial Officerscottpettit@fenixparts.com 

Investor and Media Inquiries:Chris Kettmann773-497-7575ckettmann@lincolnchurchilladvisors.com