Questron Technology, Inc. Concludes $95 Million Financing; Completes Three Acquisitions Adding Twelve New Operating Facilities.
Questron Technology, Inc. (NASDAQ: QUST, QUSTW), a leading provider of inventory logistics management programs and a value-added distributor of fasteners and related products, today announced that it closed three previously announced acquisitions, entered into a $75 million senior secured credit facility and completed a $20 million senior subordinated debt private placement through a prominent investment banking firm.
The Company said that it acquired Olympic Fasteners, based in Cleveland, Ohio for $9 million in cash, stock and notes, Capital Fasteners of High Point, North Carolina for $10.7 million in cash, stock and notes, and Action Threaded Products of Chicago, Illinois for $13.8 million in cash, stock and notes. Additional purchase price consideration of up to $4.3 million may be paid based on the future operating results of these businesses. The combined 1998 revenues of the three acquired companies were $35.8 million.
With the completion of these acquisitions, Questron had pro forma revenues for calendar year 1998 of $110.7 million and pro forma 1998 EBITDA of $17.5 million. Questron reported EBITDA of $9.2 million for 1998, without regard to these acquisitions or the recent acquisition of AFCOM, Inc. which was closed in February 1999.
Simultaneously with the completion of these acquisitions, Questron closed the refinancing of its existing loan agreement and entered into new loan agreements which (i) paid off all existing debt; (ii) provided the cash portion of the purchase price for the three acquisitions; and (iii) provided a revolving working capital facility.
The financing for Questron was provided by a group of institutional investors which loaned $20,000,000 as senior subordinated lenders, and Ableco Finance LLC and First Union's affiliate Congress Financial Corporation which provided $75,000,000 in a senior secured credit facility, of which $58,000,000 was drawn at the closing. In connection with the financing the senior subordinated lenders acquired 680,000 shares of the Company's common stock.
Dominic Polimeni, the Chairman of Questron, announced:
"The acquisitions of Capital Fasteners, Olympic Fasteners and Action Threaded Products are each a perfect fit for Questron. We have expanded our presence in key geographic areas enabling us to provide inventory logistics management services nationally to our existing Original Equipment Manufacturer (OEM) customers. We also have acquired relationships with new OEM customers. The addition of experienced management to our team is a tremendous bonus. The key managers of our business now average 21 years of industry experience."
"With the acquisitions completed in the first half of 1999, Questron has added businesses which we believe will be accretive to earnings within the first year of combined operations. These transactions have also expanded our geographic presence in the Mid-Atlantic and Midwest markets and have strengthened our management team with the addition of Robbie Gilchrist, President of Capital Fasteners, who will become Southeast Regional Vice President of our operating subsidiary, Questron Distribution Logistics, Raul Torres, President of Action Threaded Products, and Rudi Petric, President of Olympic Fasteners. Our immediate objective is to integrate these business into our overall operations, as we have with our earlier acquisitions."
Mr. Polimeni added:
"This unequalled industry experience, our 31 operating facilities, our strong growth record in earnings, EBITDA and revenues, and our internal growth puts us in a very strong competitive position as we approach the millennium. On a pro forma combined basis since 1994 our revenues have grown at a compound annual rate of 14.5% and EBITDA has grown at a compound annual rate of 26.2%. This growth rate confirms our view that OEMs are increasingly utilizing inventory logistics programs to manage C inventory items."
Questron now operates in 31 facilities providing inventory logistics management programs and other services to OEMs and other customers at the following locations: -0-
Boston, MA Cleveland, OH Dallas, TX Chesapeake, VA Columbus, OH Fort Worth, TX (2) High Point, N.C. Cincinnati, OH Austin, TX Charlotte, N.C. Grand Rapids, MI (2) El Paso, TX Duluth, GA Milwaukee, WI Juarez, Mexico Norcross, GA Chicago, IL Tucson, AZ Jacksonville, FL Minneapolis, MN Phoenix, AZ Orlando, FL Colorado Springs, CO San Diego, CA Melbourne, FL Anaheim, CA Boca Raton, FL San Jose, CA Pompano Beach, FL
Mr. Polimeni added:
"With this refinancing of our debt, Questron completes its four-year long transition from a start-up consolidator of fastener businesses to a well-financed company with a leading national presence in the inventory logistics management business. We look forward to concentrating on integrating our newest acquisitions, increasing our revenues through internal growth and continuing to look for acquisition candidates which are also excellent geographic and customer fits with our existing business."
Questron Technology, Inc., headquartered in Boca Raton, Florida, is a leading provider of inventory logistics management programs and a value-added distributor of fasteners and related products (commonly referred to as "C" inventory items). Questron's securities are traded on NASDAQ under the symbols QUST (common), and QUSTW (warrants).
Certain information contained in this release includes "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties, including those "Risk Factors" set forth in the company's current Annual Report on Form 10-K for the year ended December 31, 1998. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect unanticipated events or developments.
This release and prior releases are available on the KCSA Public Relations Worldwide website at www.kcsa.com.
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|Date:||Jul 2, 1999|
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