Checkpoint Systems and Ultrak agree to merge, creating a preeminent worldwide electronic security and surveillance solutions firm.THOROFARE, N.J.--(BUSINESS WIRE)--March 11, 1997--Checkpoint Systems, Inc. (NYSE NYSE See: New York Stock Exchange :CKP CKP Checkpoint CKP Crankshaft Position CKP Chandraseniya Kayastha Prabhu (caste of Maharastra, India) CKP Chris Key Players (band) CKP Concept Knowledge Processing ) and Ultrak, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ULTK) today announced a definitive agreement to merge, creating a pre-eminent worldwide electronic security and surveillance solutions provider with a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of approximately $1.3 billion and leading market positions in three primary businesses -- electronic article surveillance See EAS. (EAS (Electronic Article Surveillance) A security system for preventing theft in retail stores that uses disposable label tags or reusable hard tags attached to the merchandise. ), integrated closed-circuit television closed-circuit television Noun a television system used within a limited area such as a building Noun 1. closed-circuit television systems (CCTV CCTV abbr. closed-circuit television CCTV closed-circuit television ) and electronic access control (EAC EAC an abbreviation used in studies of complement, in which E represents erythrocyte, A antibody, and C complement. ). Ultrak, headquartered in Carrollton, TX, will become a wholly-owned subsidiary of Checkpoint and continue to operate under the Ultrak name. Under the terms of the definitive agreement, unanimously approved by the boards of both companies, each Ultrak common share will be exchanged for 1.15 Checkpoint common shares. The transaction, which is expected to be completed by mid-1997, is intended to be treated as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and is expected to be tax free. "The combination of Checkpoint and Ultrak is a powerful merger," said Kevin P. Dowd Dowd is a derivation of an ancient surname which was once common in Ireland but is now quite rare. The name Dowd is an Anglicisation of the original Ui Dubhda, through its more common form O'Dowd. , Checkpoint's president 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. . "It is based on two, high growth, highly profitable companies, providing innovative solutions to customers -- asset protection, safety and integrated security systems applications. The new company will have a number one or two market position in eight-of-nine discrete business lines, including Checkpoint's EAS, Ultrak's CCTV, EAC products and systems for use in security and surveillance, industrial, mobile video, traffic management, dental and medical, and professional audio applications. "Checkpoint and Ultrak will be a preeminent force in a $5.3 billion, fast growing and consolidating market," Mr. Dowd continued. "We will have enhanced resources and opportunities, including access to each other's customers, leading technology and product development with strong patent positions. In addition, we will have the ability to be the lowest cost producer of electronic security and surveillance solutions in the world and we can offer an efficient and effective worldwide product distribution system second to none in the industry." Said George K. Broady, Ultrak's chairman, president and CEO, "Ultrak, Inc. will continue to market and sell its CCTV, access control and audio products through its traditional distributor/dealer network. However, with the help of Checkpoint's 350 direct sales people worldwide for EAS creating leads for this network, we expect to be able to substantially leverage sales of our products and systems through our marketing channels. I am confident that the combined companies will continue to significantly outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, industry growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. ." Steven G. Selfridge, Checkpoint's executive vice president, added, "The cost reduction opportunities for the new company will be a bonus to the enhanced resources and opportunities made possible by the merger in the areas of sales channels and product diversity. We see, over time, large opportunities in the areas of logistics, manufacturing, purchasing and management information systems. In addition, the companies' combined balance sheets will result in cash balances of over $200 million with minimal debt, and a new, unused $200 million credit facility. This strength will provide the new company with the ability to acquire businesses in the consolidating markets where Ultrak operates." The merger is expected to be neutral to 1997 earnings per share and accretive in 1998, calculated exclusive of Checkpoint's CCTV division, which sells direct to retailers and will be divested because of channel conflict with Ultrak's much larger distributor/dealer network. Albert E. Wolf, chairman of Checkpoint, will be chairman of the new company. Kevin P. Dowd, president and chief executive officer of Checkpoint, will remain in that capacity for the new company. George K. Broady, chairman, president and chief executive officer of Ultrak, will be chairman of Checkpoint's Executive Committee and president of Ultrak. Steven G. Selfridge, executive vice president of Checkpoint, will assume the responsibilities of chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of the new company. William J. Reilly, Jr., senior vice president of Checkpoint, will assume the responsibilities of president, Checkpoint Retail Systems. Michael E. Smith, senior vice president of Checkpoint, will become executive vice president of Global Marketing. All Ultrak management will remain in their present positions. The new company's board will be comprised of 12 members (nine from Checkpoint and three from Ultrak) with one insider from each company. In connection with the transaction, each company granted the other an option, exercisable under certain conditions, to acquire shares representing 19.9 percent of its outstanding shares. Checkpoint shareholders will have approximately 72 percent and Ultrak will have approximately 28 percent of the new company's shares. The merger is subject to customary closing conditions, including certain regulatory approvals and the approval of shareholders of both companies. Ultrak, Inc., one of the three largest suppliers of CCTV and related products in 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. , is also expanding its presence in international markets. The company designs, manufactures, markets and services CCTV and related products for use in security and surveillance, industrial, mobile video, traffic management, dental and medical, and professional audio applications. Checkpoint Systems, Inc. is a leading provider of integrated security solutions for retailers worldwide and is the leading provider of radio frequency (RF) source tagging, which allows its paper-thin RF tags to be embedded into product packaging. This press release contains forward-looking statements. Any such statements are subject to risks and uncertainties that could cause actual results to vary materially from those anticipated; among these are the two companies' dependence upon conditions in the security systems industry, the size and resources of many of the companies' competitors and the need for Checkpoint to effectively integrate the Ultrak businesses and successfully manufacture and deliver technologically advanced products. Additional information with respect to these and other factors which could materially affect the companies is included in the companies' filings with the Securities and Exchange Commission, included in Checkpoint's most recent 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. , 10-K, 10-Q and Ultrak's most recent proxy statement, 10-K, 10-Q and registration statement on Form S-3 (No. 333-14545) filed on November 18, 1996. Investors should review the proposed merger, subsequent 8-K filings and make their own assessment of the combined companies' prospects. Visit Checkpoint Systems Inc.'s and Ultrak Inc's Websites: www.checkpointsystems.com www.ultrak.com CONTACT: Steven Gaynes MALLORY FACTOR Mallory Factor is Chairman of the Free Enterprise Fund ("FEF") and is often called "The George Soros of the right" by people who don't mean it as a compliment. FEF has listed five "take action" campaigns on their website (https://www.myfef.org/bin/action.center.election). INC 212/350-0000 or Steven G. Selfridge CHECKPOINT SYSTEMS, INC. 609/384-2473 or George K. Broady ULTRAK, INC. 609/384-2453 (3/12/97) or Tim Torno ULTRAK, INC. 972/280-9625 |
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