Allied Capital to Acquire SunSource Inc.Business Editors WASHINGTON--(BUSINESS WIRE)--June 19, 2001 Allied Capital Corporation (NYSE NYSE See: New York Stock Exchange :ALD ALD abbr. adrenoleukodystrophy ALD, n.pr See adrenoleukodystrophy. ALD aldolase. ) and SunSource Inc. (AMEX AMEX See: American Stock Exchange :SDP (Session Description Protocol) An IETF protocol that defines a text-based message format for describing a multimedia session. Data such as version number, contact information, broadcast times and audio and video encoding types are included in the message. & SDP.PR) today announced that Allied Capital intends to acquire SunSource Inc. ("SunSource" or the "Company") to create a privately owned portfolio company controlled by Allied Capital. The two companies have signed a definitive merger agreement, which provides that Allied Capital will pay approximately $72 million, or approximately $10.38 per SunSource common share in stock or cash for all of the outstanding common equity of SunSource, subject to certain adjustments. Management of SunSource will participate with Allied Capital in the buyout transaction and will retain an approximate 6% ownership position on a fully diluted basis in the Company. SunSource is an existing Allied Capital portfolio company, which obtained $30 million of 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". financing from Allied Capital during the fourth quarter of 2000. SunSource is one of the leading providers of value-added services and products to retail and industrial markets in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The Company is organized primarily in two business segments, The Hillman Hillman was a famous British automobile marque, manufactured by the Rootes Group. It was based in Ryton-on-Dunsmore, near Coventry, England, from 1907 to 1976. Before 1907 the company had built bicycles. Group, Inc. ("Hillman") and SunSource Technology Services, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Technology Services" or "STS (Synchronous Transport Signal) The electrical equivalent of the SONET optical signal. In SDH, the European counterpart of SONET, STS is known as STM (Synchronous Transport Module). "). Hillman provides merchandising services and products, such as fasteners and related hardware items, keys and accessories and identification items to retail outlets, primarily hardware stores, home centers and mass merchants. Technology Services offers a full range of technology-based products and services in the fluid power industry to small, medium and large manufacturers. The Company also owns a significant interest in Kar Products, a distributor of maintenance and repair products and inventory management services to commercial and industrial customers in the U.S. and Canada. Bill Walton William Theodore Walton III, better known as Bill Walton (born November 5, 1952), is a former American basketball player and current television sportscaster. He is the father of current Los Angeles Lakers player Luke Walton. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Allied Capital, remarked, "We believed SunSource was an excellent candidate for our mezzanine capital Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a company's assets that is senior only to that of a company's shareholders. when we first financed the Company last year, and we believe that by becoming a majority owner of this Company we can provide the necessary access to capital and other resources to further the growth and expansion of the various business segments. SunSource is a leader in its market niches, and is exactly the type of company we target for investment." Maurice Andrien, CEO of SunSource, said, "This is a positive transaction for SunSource shareholders. Allied Capital is a much larger public company with a liquid stock that has a strong regular quarterly dividend. By approving this transaction, SunSource shareholders will increase their liquidity through the receipt of cash or the stock of a large investment company." Allied Capital's investment in SunSource will be structured to provide a current return through interest, dividends and management fee income. The investment in SunSource will include subordinated debt and common stock. In addition, Allied Capital believes there is an opportunity to increase the value of the portfolio company over time. Necessary approvals to complete the transaction include an affirmative vote of SunSource shareholders. SunSource's publicly traded trust preferred securities will remain outstanding, and will not be converted or exchanged, and will continue to trade on the AMEX under the symbol SDP.PR, upon consummation of the merger. About Allied Capital Allied Capital is the nation's largest business development company, and provides long-term investment capital to support the expansion of growing middle-market companies. The company provides mezzanine debt and equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , and also participates in the real estate capital markets as an investor in commercial mortgage-backed securities. The company is headquartered in Washington, DC. For more information, please visit the web site at www.alliedcapital.com, call Allied Capital Investor Relations Investor relations The process by which the corporation communicates with its investors. toll-free at 888/818-5298, or e-mail us at ir@alliedcapital.com. About SunSource Inc. SunSource Inc. has two principal businesses, one focused on retail markets and the other on industrial customers. The retail business comprises The Hillman Group, Inc., including the recently acquired Axxess Technologies business, which sells to hardware stores, home centers, pet suppliers, mass merchants, and other retail outlets principally across North and South America. Their product line includes thousands of small parts such as fasteners and related hardware items, keys, and identification items such as tags, letters, numbers, and signs. Services offered include design and installation of merchandising systems and maintenance of appropriate in-store inventory levels. SunSource serves the industrial market with two companies. SunSource Technology Services provides engineering, repair, and fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. services as well as parts and equipment to manufacturers throughout the U.S. and Canada. The Company's Kar Products affiliate distributes maintenance and repair parts and offers customized inventory management services to commercial and industrial customers of all sizes in the U.S. and Canada. Additional Information Allied Capital Corporation and SunSource, Inc. plan to file with the SEC a registration statement on Form N-14. In connection with the merger, SunSource expects to mail a proxy statement/prospectus to its shareholders, which contains important information about the merger. SunSource shareholders are urged to read the 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. prospectus and any other relevant documents filed with the SEC. The proxy statement/prospectus will contain important information about Allied Capital, SunSource, the persons soliciting proxies in connection with the merger, and related transactions. Once filed with the SEC, the registration statement and proxy statement/prospectus will be available free of charge on the SEC website at http://www.sec.gov and from the contacts listed on this press release. In addition to the registrations statement and proxy statement/prospectus, Allied Capital and SunSource file annual, quarterly and special reports and other information with the SEC. You may read and copy any reports filed by Allied Capital and SunSource at the SEC public reference rooms or on the SEC website. Copies of such reports can also be obtained from the contacts listed on this press release. Forward-Looking Statements The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated This term is often used in law as equivalent to mentioned specifically, designated, or expressly named or granted; as in speaking of enumerated governmental powers, items of property, or articles in a tariff schedule. in the company's periodic filings with the Securities and Exchange Commission. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion