Thursday August 24, 8:01 am Eastern Time
Press Release
SOURCE: Commodore Applied Technologies, Inc.
Commodore Applied Technologies to Acquire Dispute Resolution Management
NEW YORK, Aug. 24 /PRNewswire/ -- Commodore Applied Technologies, Inc. (Amex: CXI - news, CXI.WS - news) today announced that it has entered into a definitive agreement to acquire Dispute Resolution Management, Inc. (DRM), a growing international consulting firm specializing in the management and settlement of complex, latent and long-tail insurance claims, including environmental, asbestos, product liability, business interruption and other claims, for large corporate and government clients. Under the terms of the agreement, effective as of August 29, 2000, CXI will own 81% of the capital stock of DRM. Consummation of the acquisition is subject to the approval by CXI stockholders owning a majority of its outstanding common stock and the receipt of customarily closing legal opinions. Commodore Environmental Services, Inc. and certain other CXI stockholders, who currently own in the aggregate in excess of 50% of CXI's outstanding common stock, have irrevocably agreed to vote all of their shares in favor of the transaction, thereby assuring stockholder approval.
Details of the terms and conditions of the acquisition of DRM will be set forth in CXI's Current Report on Form 8-K to be filed by CXI under the Securities Exchange Act of 1934, as amended, and may also be included in a separate press release to be published by CXI concurrently with the filing of such Form 8-K with the SEC.
For its fiscal year ended December 31, 1999, DRM earned before income taxes and minority interest approximately $4.3 million (approximately $2.98 million after a minority interest which subsequently terminated) on revenues of approximately $6.4 million. DRM's pretax earnings and revenues for the six months ended June 30, 2000 were approximately $2.3 million and $3.7 million, respectively. These results represent a significant increase from fiscal 1997, revenues and pre-tax earnings of only approximately $1.1 million and $250,000, respectively.
DRM represents policyholders, typically large multi-national corporations, in the non-litigated resolution of large insurance claims. DRM facilitates the settlement of claims by utilizing a series of proprietary systems to perform insurance policy archeology, policy coverage analysis and prioritization, claim documentation, coverage trigger allocation, settlement value targeting, risk allocation modeling and settlement structuring and documentation. DRM commits to manage the entire settlement process, typically in exchange for a monthly retainer and a percentage success fee payable when the insurers enter into a settlement agreement with the DRM client.
Paul E. Hannesson, president and CEO of Commodore Applied Technologies, said, ``We believe that this acquisition will enhance our consolidated revenues and cash flows and significant supplement our technology solutions with a strategic package of financial solutions and bring significant added value to our markets and growing number of clients. Both businesses focus on the highest, added value sectors of their respective markets allowing them to earn above average profits.''
The current management of DRM will continue their business growth programs which are spearheaded by DRM chairman and CEO, William J. Russell and president and COO, Tamie P. Speciale. Mr. Russell stated, ``This merger with Commodore accomplishes many of the objectives we have had for the growth of our company. We believe the market for our services is extensive based upon the tens of billions of dollars of reserves, which have been established by property casualty insurers worldwide. We will be able to extend the service offerings to our clients to aid them with regard to both the financial and technological aspects of the clean up of their impacted properties. Additionally, the clientele of Commodore represents an untapped market for our services both domestically and internationally. We have a very high regard for the officers and directors of Commodore and look forward to the new opportunities which we believe will result from the combination of our two businesses.''
Commodore Applied Technologies, Inc., headquartered in New York, New York and traded publicly on the American Stock Exchange -- is a technical and financial solutions company currently focused on the high-end environmental markets. Commodore is focused on the treatment and management of high-end hazardous waste from nuclear and chemical sources. Additionally, Commodore will provide negotiated financial solutions for complex, long-tail liabilities in the environmental, product liability, and business interruption markets. Through its wholly owned subsidiaries, Commodore Nuclear, Commodore Advanced Sciences and Commodore Resolution, the company provides technical engineering services, proprietary remediation technologies, and negotiated financial solutions to the government and private sectors. For more information please visit our web sites at commodore.com and drmworld.com.
These materials contain forward-looking statements based on a series of projections and estimates regarding economics within the company's markets, the industries in which the company operates, the effects of legislation and regulations, as well as business and competitive outlook.
SOURCE: Commodore Applied Technologies, Inc. |
