Stonepath Group Completes Sale of U.S.-Based International Services Unit Substantially Reducing Debt
October 20 2006 - 6:37PM
PR Newswire (US)
SEATTLE, Oct. 20 /PRNewswire-FirstCall/ -- Stonepath Group, Inc.
(AMEX:STG) ("Stonepath"), the logistics services organization,
announced today that it has completed the sale of its Stonepath
Logistics International Services, Inc. ("SLIS") division to JTM
Acquisition Corporation ("JTM") for aggregate consideration of
$17.9 million, consisting of a closing cash payment of $12.2
million and the assumption or satisfaction by JTM of certain
liabilities associated with SLIS. The closing cash payment is being
paid to Stonepath's lender, Laurus Master Fund, Ltd ("Laurus"), to
reduce Stonepath's outstanding indebtedness. Stonepath expects to
sign an additional agreement with JTM to sell its Stonepath
Logistics (Germany) GmbH subsidiary for $100,000, raising the total
consideration of the transactions to $18.0 million. JTM is
receiving financing to consummate the transaction from Laurus,
Stonepath's current lender in North America, and The ComVest
Group's private equity fund ComVest Investment Partners II, LLC
("ComVest"). The Company expects to recognize a book loss on the
sale of SLIS and its German subsidiary of approximately $3.5
million. SLIS, which was acquired by Stonepath in 2002, was
Stonepath's North American-based logistics business providing
international air and ocean logistics services. It included Global
Container Line, Inc. Stonepath Group's offshore subsidiaries,
including those in Asia, remain intact. Concurrent with the sale,
Bob Arovas, formerly President and Chief Financial Officer, assumes
the role of Stonepath Chief Executive Officer, a role he has held
in an interim capacity since July 2006. Bob Christensen, formerly
Chief Accounting Officer, becomes Chief Financial Officer, likewise
a role he has held in an interim capacity since July 2006. "The
sale of the unit was driven by the need to refocus the Company's
international business and significantly reduce debt obligations,"
Arovas said. "We have established a continued agency relationship
with SLIS and will maintain our focus on the international
logistics market through SLIS as well as through other strategic
alternatives. The Company will maintain its subsidiaries in China,
Hong Kong (SAR), Malaysia, Cambodia and Brazil together with its
network of agents in other countries. Our services to customers
both internationally and domestically will remain without
alteration and we will maintain our principal focus internationally
on trade to and from Asia." Arovas added, "Going forward, we
continue to look at opportunities to further reduce the Company's
outstanding liabilities and to restructure our business to achieve
profitable future operations." The founder and President of JTM is
Jason F. Totah, who served as Stonepath's Chief Executive Officer
from October 2004 until July 20, 2006. About ComVest 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 capital in over 200 public and private companies
worldwide. 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 (http://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. Risk factors that may
cause our actual events and plans to differ materially from those
set forth in such forward-looking statements, as well as 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,
http://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, Inc. CONTACT: Stonepath Group, Inc.,
+1-206-336-5400 Web site: http://www.stonepath.com/
http://www.comvest.com/
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