NEWS - GORDON LABS - NEW PRESIDENT/COO
Chromatics Agrees to Acquire Gordon Laboratories;
Gordon CEO Brian Fitzpatrick to Become President & COO of Chromatics
NEW YORK, April 18 /PRNewswire/ -- Chromatics Color Sciences International, Inc. (Nasdaq: CCSI) and Gordon Laboratories, Inc., a privately-held formulator and manufacturer of cosmetics, hair care and other personal care products, announced today a definitive agreement whereby Gordon will be acquired by Chromatics for approximately $6 million in stock and cash.
Under terms of the agreement, CCSI is acquiring an 80% equity interest in Gordon at the closing with an option to acquire the remaining 20% within one year from the date of the closing. The transaction is expected to close later this month, subject to certain closing conditions including the amendment of Gordon's existing long-term credit facility on terms acceptable to CCSI. At that time Brian Fitzpatrick, Chief Executive Officer of Gordon, will be relocating to New York to become President & Chief Operating Officer of the combined business, inclusive of Gordon's operations and staff which will be incorporated into Chromatics.
The Company's Executive Search Committee, during the interview process to find a new president, unanimously decided that Mr. Fitzpatrick would be the ideal selection for this senior management position after reviewing the credentials of other qualified candidates. Mr. Fitzpatrick has been the Chairman, President & CEO of Gordon since April 1996 and, prior to this, he served as president of several electronic manufacturing companies after working for the Polaroid Corporation in its industrial marketing division. He graduated with an MBA degree in Finance & Marketing from Adelphi University in
1986 and received a BS degree in Marketing from Seton Hall University in 1975.
Gordon is headquartered in Carson, CA, where it recently expanded its production capacity greatly by moving into a custom-designed, state-of-the-art 60,000 sq. ft. laboratory and manufacturing facility. The Company is recognized within the personal & beauty care industry as a high-quality fomulator, packager and contract manufacturer of a variety of cosmetics and other beauty care products for branded consumer product marketers and private label retailers. The Company's customer base consists of leading brand marketers, major mass merchandisers and direct-sale marketers, including such leading names as Sears, The Gap, Kmart, Tova, Gerber, Herbalife, The Body Shop, Bath & Body Works and Victoria's Secret. Gordon anticipates revenues of
approximately $8 million for its fiscal year ending May 31, 2000, a volume level it expects to increase significantly now that it has expanded its production capacity.
Commenting on the acquisition, Mrs. Darby Macfarlane, Chief Executive Officer of CCSI, stated, "I am very pleased that Gordon has agreed to sell their business to CCSI, since the synergies between our two companies are truly outstanding. Most importantly, the acquisition would provide CCSI with an experienced management team fully operational in the cosmetics & beauty care industry, guided by the leadership of Mr. Fitzpatrick who will become our new President and Chief Operating Officer as soon as the deal closes. I have known Brian and worked with him since 1996, and I am elated with the prospect
of having an executive of his stature leading our company into the future".
Mrs. Macfarlane continued, "Gordon can provide CCSI with the infrastructure we need to expeditiously commercialize our color science
technology in cosmetics, hair colorants and other beauty care markets. Our two companies already had entered into a licensing agreement to commercialize the marketing of CCSI's new, hand-held Colormate(R) device and system for
selecting personalized colors of cosmetics, hair color and beauty related products, including custom-blended cosmetic foundations. The acquisition of Gordon would facilitate moving more quickly into this area. On a much broader
scale, with Gordon's manufacturing and marketing capabilities, we would expect to generate expanded revenues from laboratory product chromaticity studies, color-measuring equipment and related products sold to a wide variety of customers serviced by Gordon, now and in the future."
Another important aspect of the acquisition that would benefit both companies is the capability Gordon will have to produce TLc-Lensette(R) calibration standards for the Company's medical device, the Colormate(R) TLc-BiliTest(R) non-invasive monitoring system for infant jaundice. The Company expects it would qualify Gordon for the production of calibration standards by the end of the year. |
