DualStar Announces New Blackacre Proposal to Invest $46 Million and Termination of Earlier $15 Million Agreement; Postpones Annual Meeting; Obtains Bridge Loan
NEW YORK--(BSUINESS WIRE)--December 3, 1999--DualStar Technologies Corporation
("DualStar" or the "Company") (Nasdaq: DSTR) announced today that it has agreed to
terminate its earlier $15 million agreement with Blackacre Capital Management, L.L.C. and
certain of its affiliates (collectively, "Blackacre"). Blackacre has now proposed to
invest approximately $46 million in the Company. As a result, DualStar has also announced
today that it has deferred its Annual Meeting of Stockholders scheduled to be held on
December 8, 1999 in New York City.
Under the Company's prior agreement with Blackacre, previously announced on August 25,
1999, Blackacre would have invested approximately $15 million through the purchase of
DualStar common stock and a convertible note, and granted DualStar, in exchange for
warrants, access rights to deliver voice, video, data, energy and other services to
Blackacre's real estate holdings.
Under Blackacre's new proposal, subject in all respects to agreement with DualStar on
final terms and the execution of definitive agreements, Blackacre proposes to invest
approximately $46 million in DualStar through the purchase of 4,050,000 shares of common
stock at a price of $4.00 per share and a $30 million long-term 3% interest note,
convertible into DualStar common stock at a conversion price of $4.00 per share.
Blackacre's new proposal includes a "strategic alliance" with DualStar, under which it
would grant DualStar the right of first refusal to acquire similar access rights to
properties owned, controlled or managed by Blackacre and/or its affiliates. Under this
proposal, Blackacre would seek representation on DualStar's Board of Directors
commensurate with its investment. Under Blackacre's proposal, and assuming Blackacre
fully converted the principal under the $30 million convertible note, Blackacre would
then own approximately 51.7% of the Company's then-outstanding common stock (based on
10,791,000 shares of common stock outstanding as of today). The Company can make no
assurances that an agreement will be reached with Blackacre concerning the terms and
conditions on the $46 million investment.
If final agreement is reached among the Company and Blackacre on the $46 million
proposal, stockholder approval would be required to effectuate the transactions. The
Company anticipates that it will execute a letter of intent with Blackacre in respect of
the new proposal within fifteen days. Accordingly, DualStar has determined to postpone
its Annual Stockholders Meeting, originally scheduled for December 8, 1999, to a date
currently anticipated to be in February or March, 2000.
In a related matter, an affiliate of Blackacre provided the Company with a $7 million
secured convertible bridge loan today, bearing interest at the rate of 11% per annum,
convertible into the Company's common stock at $4.861 per share, and with a term no
greater than five months. As an additional condition, the bridge loan will come due if
DualStar and Blackacre do not execute a letter of intent for the $46 million transaction
within fifteen days. The Company shall use approximately $2.13 million of the proceeds to
repay Technology Investors Group, LLC ("TIG") in full on several notes payable; TIG shall
simultaneously purchase a participation interest of approximately $2 million in the
bridge loan from the Blackacre affiliate.
DualStar also announced today that Michael F. Whalen, Blackacre's prior designee to
DualStar's Board of Directors, has resigned for reasons unrelated to the transactions
described above.
Blackacre and its affiliates manage funds and accounts of over $5.5 billion. Blackacre
and its fund management affiliates are headquartered in New York City and focus on
investments in companies, real estate, asset-based lending and related investment
opportunities in the United States, Europe and Asia. Its investment staff includes
professionals with operating, investment and management experience. Moreover, their
sizeable portfolio has led to relationships with an extensive array of industry owners
and operators used to identify and evaluate investment opportunities and operate their
portfolio companies.
DualStar Technologies Corp., through its subsidiaries, designs and installs
infrastructure systems and provides services that control and enhance the environment in
buildings. These systems and services include: heating, ventilation and air conditioning
(HVAC); electrical; building and energy management (BMS); enhanced local, regional and
long distance telephony as a Competitive Local Exchange Carrier (CLEC); direct broadcast
satellite (DBS) and cable television as a System Operator; high-speed Internet access as
an Internet Service Provider (ISP); and security and safety. DualStar created and owns
many innovative trademarked concepts, including the CyberBuilding(R), CyberCierge(R),
Building Area Network(R) (BAN), Home Area Network (HAN), Community Area Network (CAN),
InfoStructure, InfoStructors, CyberView(R), CyberBuilders(R), DualStar(R), DualStar
Communications(R) and DualStar Technologies(R). For more information, visit the Company's
Web site at dualstar.com, e-mail info@dualstar.com, or call (718) 340-6655.
The Company's securities are traded on The Nasdaq National Market under the symbols DSTR
(common) and DSTRW (warrants).
This press release and the materials referred to hereby contain forward-looking
statements regarding the Company's business and future plans of operations. When used
herein, the words "intends," "expects," "plans," "estimates," "projects," "believes,"
"anticipates" and similar expressions are intended to identify forward-looking
statements. Forward-looking statements involve known and unknown risks and uncertainties.
These and other important factors, including those set forth in the Company's Annual
Report on Form 10-K (available to the public at www.sec.gov), may cause the actual
results and performance to differ materially from the future results expressed in or
implied by such forward-looking statements. The forward-looking statements contained in
this press release speak only as of the date hereof and the Company disclaims any
obligation to provide public updates, revisions or amendments to any forward-looking
statements made herein to reflect changes in the Company's expectations or future events.
CONTACT: Robert Birnbach
Chief Financial Officer
e-mail: info@dualstar.com
Voice: 718.340.6655
Fax: 718.340.6659
13:03 EST DECEMBER 3, 1999 |
