Here is a possible Internet play
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Aviation Group, Inc. Announces Intent to Purchase Aviation Laboratories, Inc.
50% Interest in Internet Distribution Business Included in Transaction
DALLAS--(BUSINESS WIRE)--Jan. 4, 1999--Aviation Group, Inc. (Nasdaq:AVGP - news) announced today that it has executed a letter agreement to acquire Aviation Laboratories, Inc., a profitable Texas-based leader in aircraft fluid analysis.
Aviation Laboratories provides laboratory analysis of aviation fluids to regional airlines, corporate fleets and general aviation aircraft. It also sells related filters, degreasers, deicers, and other products through an in-house telemarketing sales organization. Its customer base includes over 17,000 accounts worldwide. Revenues for calendar 1998 exceeded $7,000,000. ''Aviation Laboratories meets all of our stringent criteria for acquisition; a history of profits, significant market share in its particular niche, and opportunity for future growth,'' said Lee Sanders, Aviation Group CEO.
Included in the purchase of Aviation Laboratories is a 50.0% ownership position in PartsBase.com, an Internet-based aviation parts clearing website established and operated by Aviation Laboratories since 1997. PartsBase.com began generating subscription revenues during 1998, and presently generates over 150,000 website hits per month. Existing owners of Aviation Laboratories will continue to own the other 50.0% interest in PartsBase.com, and assist Aviation Group management in its future funding and operation after the closing.
PartsBase.com presently has over 30 million parts and 7,000 registered users included in its interactive database, which also links over 1,300 related third-party aviation websites. ''Connecting airlines and other major customers to suppliers is an important requirement that will further drive consolidation of the aviation service out-sourcing sector. Our goal is to position PartsBase.com as a primary e-commerce link for the industry. PartsBase.com, combined with Aviation Laboratories' proven telemarketing organization, represents a state-of-the-art opportunity to sell and communicate with aircraft owners and commercial airlines all over the world,'' said Sanders.
The acquisition will be accounted for as a purchase, and certain management will remain. The transaction is subject to the completion of mutually acceptable documentation and financing by Aviation Group, Inc. Closing is expected in February 1999. Terms were not disclosed.
Sanders noted that adding Aviation Group's existing product lines to the Aviation Laboratories telemarketing product list is an early company goal. According to Sanders, there are ''thousands'' of independently-owned providers of products and services to aircraft manufacturers and airlines. ''Though their profits and potential are significant, small to mid-market companies seldom attract the buyers among the major aviation and aerospace corporations. The trend toward market/vendor consolidation is increasing, and Aviation Group will continue to take advantage of opportunities to acquire companies of the quality and size of Aviation Laboratories at favorable multiples,'' said Sanders.
Aviation Group is a publicly traded holding company based in Dallas. Aviation Group operates world-class aircraft painting facilities, component repair and replacement parts manufacturing, airline ground services, and fuel, parts, and light maintenance services to major airlines, and general, corporate, and freight aircraft customers. Additional information can be obtained from the Company's website at www.aviationgroup.com.
This press release contains statements that constitute forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that may cause or contribute to such differences include, among other things, the Company's dependence on one customer, changes in the airline travel industry, seasonality of the Company's painting business, risk of future losses from operations, the ability to make additional business acquisitions, uninsured casualty losses, environmental regulation of airline stripping and painting operations and increased competition in the airline services industry. Other risks and uncertainties include changes in business conditions and the economy in general, changes in governmental regulations, unforeseen litigation and other risk factors identified in the Company's SEC filings under ''Risk Factors.'' The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this press release. |
