Stonepath Group to Acquire Majority Stake in Leading Shanghai-Based Logistics Business
November 12 2003 - 10:07PM
PR Newswire (US)
Stonepath Group to Acquire Majority Stake in Leading Shanghai-Based
Logistics Business Stonepath Logistics Expands International
Network in Greater China PHILADELPHIA, Nov. 12 /Xinhua-PRNewswire/
-- Stonepath Group (AMEX:STG), a global logistics services
organization, has signed a definitive agreement to acquire a
majority interest in Shanghai-based Shaanxi Sunshine Express Int'l
Co., Ltd. (Shaanxi). Established in 1993, the business is one of
the leading integrated logistics companies in the PRC, providing a
wide-range of customized transportation and logistics services and
supply chain solutions including global freight forwarding,
warehousing and distribution, shipping services and special freight
handling. Once completed, the acquisition will facilitate
Stonepath's expansion into the vital greater China region where
many of Stonepath's clients have significant supplier relationships
and where extraordinary economic growth is driving demand for
logistics services. Shaanxi reported revenues in excess of $50
million for 2002. In consideration of the acquisition of a 55%
interest in Shaanxi, the transaction is valued at up to $11
million, consisting of cash of $3.5 million and stock of $2.0
million at closing, and a five year earn-out arrangement based upon
the future financial performance of Shaanxi. As additional purchase
price, on a post closing basis the Company has agreed to pay
Shaanxi for its closing date working capital. Stonepath's Chairman
of the Board and CEO, Dennis Pelino, remarked, 'Shaanxi is one of
the strongest and best known logistics companies in Greater China,
consistently ranked as one of the top 10 providers in the region.
As an 'A-Class' international forwarder with a strong executive
team, we will be gaining a superb partner that will add an
important geographic region to our international network and will
provide a solid foundation for the growth of our company throughout
Greater China.' Pelino continued, 'China's economy is surging. U.S.
corporations continue outsourcing more of their manufacturing to
the region and China's extraordinary internal growth is creating a
huge demand for raw materials needed to build infrastructure,
supply manufacturing sectors and satisfy a growing consumer market.
Shaanxi will establish Stonepath as a leading transportation
provider positioned to take advantage of these trends.' Andy Tsai,
President and founder of Shaanxi, commented, 'Joining Stonepath is
a very positive development for the customers, employees and
partners of Shaanxi. We're looking forward to the numerous
opportunities that this partnership will bring to our business and
we are confident that Shaanxi will add a great deal of value to the
Stonepath Logistics global network.' The transaction is expected to
close within 60-90 days, subject to certain closing conditions
including completion of audited financial statements and securing
of regulatory and other third-party approvals. About Stonepath
Group (AMEX:STG) Stonepath Group ( http://www.stonepath.com ) is
building a global logistics services organization that integrates
established logistics companies with innovative technologies.
Through our subsidiaries, Stonepath Logistics offers a full-range
of time-definite transportation and distribution solutions. For
more information about the Company, please contact John Brine at
+1-212-254-8280. This press release may include 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. We have based these forward- looking statements on our
current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions about us and our subsidiaries, that
may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by such forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may,'
"will,' "should,' "could,' 'would,' "expect,' "plan,' 'anticipate,'
'believe,' 'estimate,' 'continue,' or the negative of such terms or
other similar expressions. This press release relies upon unaudited
internal financial information prepared by Shaanxi. Closing of the
transaction is contingent upon completion of audited financial
statements. There can be no assurance that the audit will not
require significant adjustments to Shaanxi's unaudited results.
These adjustments could materially effect the financial information
presented. In addition, past results are not necessarily an
indication of future performance. Other factors that might cause or
contribute to such a discrepancy include, but are not limited to,
those identified in our other Securities and Exchange Commission
filings, other public documents, and recent press releases, which
can be found on our corporate Web site, http://www.stonepath.com .
DATASOURCE: Stonepath Group CONTACT: John Brine, SVP, Marketing
& Communications of Stonepath Group, +1-212-254-8280, or fax,
+1-212-254-8595, or Web Site: http://www.stonepath.com/
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