Stonepath Group Signs Letter of Intent to Sell U.S.-Based International Services Unit
July 20 2006 - 8:00AM
PR Newswire (US)
SEATTLE, July 20 /PRNewswire-FirstCall/ -- Stonepath Group
(AMEX:STG), the logistics services organization, announced today
that it has signed a letter of intent with ComVest Investment
Partners, II, LLC ("ComVest") and JTM Acquisition Corporation
("JTM," together with ComVest, "COMVEST-JTM") for the sale of its
Stonepath Logistics International Services, Inc. ("SLIS") and
Stonepath Logistics (Germany) GmbH units, for a proposed all cash
price of $18 million. SLIS, which was acquired by Stonepath Group
in 2002, is Stonepath's North American-based logistics business
that provides international air and ocean logistics services.
Stonepath Group's offshore subsidiaries, including those in Asia,
will remain intact. Dennis L. Pelino, Chairman of Stonepath Group,
said, "Selling SLIS will enable the Company to significantly reduce
borrowings and support its efforts to increase shareholder value.
This has been a very challenging period for Stonepath and our
shareholders and we are doing everything in our power to unleash
the value of our assets while maintaining continuity for our
customers and employees worldwide." Pelino continued, "If this
transaction is completed, Stonepath Group intends to sign long-term
agency agreements with SLIS, which will continue handling
transactions and shipments in the U.S. for our offshore businesses,
as it has in the past." JTM was formed and is led by Jason Totah,
currently Stonepath Group's Chief Executive Officer. Due to the
nature of this offer, additional procedures have been implemented
by Stonepath Group, and by Mr. Totah, designed to protect the
integrity by which Stonepath Group evaluates or negotiates
strategic options with COMVEST-JTM, as well as to preserve
Stonepath Group's ability to appropriately manage the operation of
SLIS during this process. As a result of his role in the
acquisition of SLIS, Jason Totah will be stepping down as Chief
Executive Officer while the transaction is pending. Bob Arovas,
currently the Company's CFO and President, will assume the role of
interim CEO, and Bob Christensen, Chief Accounting Officer, will
assume the role of interim CFO. The sale is contingent upon the
successful completion of negotiations between Stonepath and
COMVEST-JTM and the satisfaction of customary conditions to
closing, including corporate and third-party approvals. The
companies expect to close the sale within a 45-day period. The
Board of Directors approved Stonepath Group entering into the
letter of intent, which is non-binding with respect to either the
buyers or the seller other than with regard to an exclusivity
agreement with COMVEST-JTM included therein whereby Stonepath Group
has agreed not to negotiate with persons other than COMVEST-JTM or
solicit alternatives to the transaction with COMVEST-JTM for a
45-day period. About ComVest Investment Partners The ComVest Group
is a Leading Private Equity Firm focused on investing in
middle-market companies. Since 1988 ComVest has invested more than
$2 billion of equity capital in over 200 public and private
companies world-wide. Through the firm's extensive financial
resources and broad network of industry experts, the firm is able
to offer its portfolio companies total financial sponsorship,
critical strategic support, and business development assistance.
The firm has offices in West Palm Beach, Florida and New York City,
New York (http://www.comvest.com/). About Stonepath Group
(AMEX:STG) Stonepath (www.stonepath.com) is a global, third-party
logistics organization providing a full range of transportation and
distribution solutions to multinational and local businesses
including a diverse client mix of retail leaders, automotive and
technology concerns, government agencies, and defense contractors.
This Press Release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
regarding future events and plans. We have based these
forward-looking statements on our current expectations and
projections about such future events and plans. These
forward-looking statements are not guarantees and are subject to
known and unknown risks, uncertainties and assumptions about us
that may cause our actual events and plans to be materially
different from any future events and plans expressed or implied by
such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "guidance,"
"may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "estimate," "continue" or the negative of
such terms or other similar expressions. Although it is impossible
to identify all of the factors that may cause our actual events and
plans to differ materially from those set forth in such
forward-looking statements, such factors include the inherent risks
associated with any significant business transaction, including the
ability to satisfy both parties' conditions to consummation of such
a transaction. Risk factors that are relevant to an analysis of our
business generally include, but are not limited to, those factors
identified in our Securities and Exchange Commission filings
(including our Annual Report on Form 10-K for 2005), other public
documents and recent press releases, which can be found on our
corporate web site, www.stonepath.com. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date made. We undertake no obligation to publicly
release the result of any revision of these forward-looking
statements to reflect events or circumstances after the date they
are made or to reflect the occurrence of unanticipated events.
DATASOURCE: Stonepath Group CONTACT: John Brine, +1-212-254-8280,
for Stonepath Group Web site: http://www.stonepath.com/
http://www.comvest.com/
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