Ag Services of America, Inc. Signs Definitive Agreement with American Securities Capital Partners, L.P. and Secures Additional Funding.Business Editors CEDAR FALLS, Iowa--(BUSINESS WIRE)--Feb. 25, 2003 Ag Services of America, Inc. (NYSE NYSE See: New York Stock Exchange :ASV ASV abbr. Bible American Standard Version ASV n abbr (= American Standard Version) → traduction de la Bible ASV n abbr (Bible) (= ) and American Securities Capital Partners, L.P. (ASCP ASCP American Society of Clinical Pathologists. ) announced today the signing of a definitive agreement providing for an investment of up to $70 million in Ag Services by ASCP. The agreement provides that ASCP will invest up to $70 million in Ag Services over a three-year period. The first tranche of $35 million is expected in the first quarter of the Company's fiscal year, which ends on May 31, 2003, subject to shareholder approval and other closing conditions. Two additional tranches of $17.5 million each will be made in the two following years, subject to certain Company performance thresholds and other closing conditions. The last tranche of $17.5 million can be terminated if it is not needed to support the Company's growth plans. ASCP will be purchasing Ag Services' 8.375% 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". , which may be redeemed after seven years and is convertible to common stock at a price of $8.50 per share. ASCP will have voting control of Ag Services after the initial funding of $35 million occurs. A definitive proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. will be mailed in connection with a shareholder meeting seeking to approve this transaction. Ag Services' board of directors', including the three founders, have agreed to vote their shares, currently representing approximately 23% of Ag Services, in favor of this transaction. Additionally, Ag Services announced an increase of $100 million to its current revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. . This increases the current credit facility to $200 million and allows additional loan commitments to be made for the 2003 crop season. The Company also continues to work towards finalizing a long-term replacement of its current, secured credit facility. American Securities Capital Partners is the private-equity investment arm of American Securities, a family office founded in 1947 by the late William Rosenwald, to manage his share of his family's Sears Roebuck fortune. ASCP manages more than $1 billion of committed capital in private equity and is currently investing its third private-equity investment fund with outside investors, which has $650 million of capital committed. Ag Services of America, Inc. is based in Cedar Falls, Iowa Cedar Falls is a city in Black Hawk County, Iowa, United States, and it is home to one of Iowa's three public universities, the University of Northern Iowa. The population was 36,145 at the 2000 census. , and is a leading supplier of crop input financing and agricultural inputs, including seed, chemicals and fertilizers to primarily corn and soybean soybean, soya bean, or soy pea, leguminous plant (Glycine max, G. soja, or Soja max) of the family Leguminosae (pulse family), native to tropical and warm temperate regions of Asia, where it has been growers in the U.S. The Company's one-stop shopping business model includes competitive and flexible financing packages through its AgriFlex Credit(R) program combined with the most comprehensive offering of agricultural inputs from national sources such as Asgrow, BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida , Dekalb, Dow AgroSciences, DuPont, Garst, Monsanto, Syngenta and Pioneer Hi-Bred. The Company also administers additional financing programs for various suppliers, manufacturers and distributors in the agricultural industry and provides ancillary services such as crop insurance and grain marketing. 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 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for forward-looking statements. This release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially, include the following: general economic conditions within the agricultural industry; competitive factors and pricing pressures; changes in product mix; changes in the seasonality of demand patterns; changes in weather conditions; changes in agricultural regulations; unknown risks; the amount and availability under its asset backed securitization program; and the risks described from time to time in the Company's SEC reports. AgriFlex Credit is a registered trademark of Ag Services of America, Inc. All other trademarks or product names are the property of their respective owners. For more information visit www.agservices.com or www.american-securities.com. |
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