Advanced Communications Partners with H.I.G. Capital, LLC, Completes Recapitalization and Acquires Industry Leading Electronics Parts Distributor.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Advanced Communications Technologies, Inc. (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. : ADVC ADVC Analog to Digital Video Converter ), a New York-based company that specializes in the consumer electronic aftermarket service and supply chain, known as reverse logistics This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , announced today that it has completed its acquisition of privately held Vance Baldwin Electronics, an Original Equipment Manufacturer Parts Distributor that has been a leader in the industry for over fifty years. Vance Baldwin has operations in southern Florida and suburban Atlanta and distributes parts ranging from consumer electronics, computers, printers and office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). . In addition, Vance Baldwin provides service aids and industrial products such as cable, tools, test equipment, cleaners and other installation equipment. The Company acquired all of the outstanding equity interests in Vance Baldwin in exchange for consideration consisting of cash, a convertible promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. and an equity interest in the Company in the form of shares of the Company's newly designated Series D Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". . In addition, certain other members of the Vance Baldwin management group received an equity interest in the Company in the form of Series D Convertible Preferred Stock. To finance the acquisition, related transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , repayment of outstanding debts and to provide additional working capital, the Company raised $30 million of capital from its sale of Series C Convertible Preferred Stock to institutional investors, principally to an affiliate of H.I.G. Capital, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , and the issuance of senior and subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". to a syndicate arranged by Sankaty Advisors, LLC, a leading private manager of fixed income and credit instruments. In connection with the recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. , the Company issued a total of 8,412 shares of its newly designated Series A-2 Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. in exchange for all of its previously outstanding shares of Series A, Series B and Series A-1 Preferred Stock. The Series A-2 Preferred Stock will automatically convert to common stock when the Company authorizes sufficient shares of common stock. Through Cyber-Test, Inc., its operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. acquired in May 2004, the Company has until this time participated only in the repair, refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur and advanced exchange segment of the reverse logistics industry. Cyber-Test, as well as other service providers purchases replacement parts used in repairing equipment from parts distributors such as Vance Baldwin. The Company believes that Vance Baldwin will have the opportunity to source repair work to Cyber-Test that it does not have the expertise to perform itself. In terms of sales Terms of sale Conditions under which a firm proposes to sell its goods or services for cash or credit. revenue, the size of the replacement parts market is substantially greater than the market served by Cyber-Test. Wayne Danson, Advanced Communications' president and chief executive officer, commented, "We are very excited about this transaction as it has been a long-time in the making. Purchasing Vance Baldwin and having a long term partner in H.I.G. Capital, LLC represents a significant and positive move forward in the Company's operational and financial transformation. With the acquisition of the second largest parts distribution enterprise in the consumer electronics market, the Company will now be expanding beyond its core repair business and, based on Vance Baldwin's historical performance, increasing its revenue run rate by almost six fold. We believe this is a major step forward in executing our strategy to be a vertically integrated full service provider in the reverse logistics segment of the consumer electronics industry." "I have seen the industry change over the past several decades and believe that this strategic combination is right for both companies" said Fred Baldwin, chief executive officer of Vance Baldwin. "I am pleased to be a part of the Advanced Communications group." Robert Coolidge, Vance Baldwin's President, said "I am looking forward to the new opportunities that this transaction affords to what has been a family owned business for over 50 years." John Black, a Managing Director of H.I.G. Capital, LLC, commented, "We have extensive experience in the reverse logistics industry. We believe the consumer electronics industry is eager for a national repair solution that also has the ability to manage parts logistics on behalf of retailers, manufacturers and third-party administrators. We commend Advanced Communications' vision to broaden their traditional model of repair services to include parts logistics management Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective, forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet and look forward to working with the Company as they build out their national services network." For the year ended December 31, 2006, Vance Baldwin recorded sales revenue of $48.7 million (unaudited). Janney Montgomery Scott acted as financial advisor and placement agent for the Company in connection with this transaction. About Vance Baldwin Electronics Founded in 1953, Vance Baldwin Electronics distributes original replacement parts for over 70 different manufacturers and remains to be one of the largest suppliers of such parts in the nation. Today, the company distributes parts for products ranging from consumer electronics, computers and appliances to imaging equipment such as printers and faxes, as well as industrial items, to a variety of channels which include national retailers, third-party extended warranty The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. providers, independent regional retailers and independent electronic equipment repair companies. Providing global support and developing new ways to improve customer service, particularly with the use of technology integration, has helped Vance Baldwin Electronics distinguish itself from its competition. Vance Baldwin features one of the largest inventories in the country with more than 6 million parts in its database. Vance Baldwin's new distribution facility, located near Atlanta, Georgia, allows for 2 day delivery to the vast majority of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. with UPS Ground Service. It maintains a call center with highly trained parts consultants to receive customer calls and provide assistance with parts selection and ordering. For more information about Vance Baldwin Electronics, visit www.vancebaldwin.com. About Advanced Communications Technologies Advanced Communications is a New York-based company specializing in the technology after-market service and supply chain, known as reverse logistics. Its principal operating unit operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , Encompass Group Affiliates, acquires businesses that provide computer and electronic repair services, parts distribution and end-of-lifecycle services. Encompass owns Cyber-Test, an electronic equipment repair company that provides repair and reverse logistics services to third-party warranty companies that service OEMs, national retailers and national office equipment dealers. Cyber-Test's services include advance exchange, depot repair, call center support, parts and warranty management, repair of fax machines, printers, scanners, laptops, monitors and multi-function units, including PDAs and digital cameras. For more information, visit Cyber-Test's website at http://www.equipfix.com. About H.I.G. Capital, L.L.C. H.I.G. Capital L.L.C. is a leading global private equity investment firm with more than $4 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, and San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden in the U.S., as well as affiliate offices in London, Paris and Hamburg in Europe, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. H.I.G. also has extensive experience with financial restructurings and operational turnarounds. Since its founding, H.I.G. has completed more than 75 transactions. The firm currently manages a portfolio of more than 50 companies with combined revenues in excess of $7 billion. For more information, please refer to the H.I.G. website at www.higcapital.com. This release and oral statements made from time to time by Advanced Communications' representatives concerning the same subject matter may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements can be identified by introductory words such as "expects," "anticipate," "plans," "should," "believes," "will," or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Many factors may cause actual results to differ from forward-looking statements, as well as inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. Known risks and uncertainties include those identified from time to time in the reports filed by Advanced Communications with the Securities and Exchange Commission, which should be considered together with any forward-looking statement. No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements. |
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