Anacomp Announces Agreement to Sell Magnetics Business for Up to $47.5 million
SAN DIEGO, April 28 /PRNewswire/ -- Anacomp(R), Inc. (Nasdaq: ANCO), a world leader in digital document-management services, today announced that it has signed a definitive agreement to sell its Magnetics business to an investment consortium led by Windward Capital of New York. The transaction is valued at up to $47.5 million, consisting of $40 million in cash, $5 million in a subordinated note between the two parties, and future incentive payments to Anacomp.
Anacomp's Magnetics business provides product and service solutions, marketed under leading brand names such as Memorex(R), Graham(R), Dysan(R), and StorageMaster(R), that enable businesses to store and retrieve large amounts of corporate data. The division employs about 600 people worldwide and operates manufacturing facilities in the United States and Europe. It accounted for approximately 18% of Anacomp's revenues and approximately 8% of Anacomp's EBITDA in the company's latest reported fiscal quarter ended December 31, 1998.
"Our decision to sell the Magnetics business represents an important step in our strategic growth plan," said Ralph W. Koehrer, Anacomp president and chief executive officer. "We are committed to growing our high-margin digital services and this divestiture will allow us to focus more of our time, energy, and resources on that area." Anacomp said cash proceeds from the sale will be used primarily for investments in new digital services.
The transaction, which is contingent on financing and regulatory approval, is expected to close within 45 days. Under the terms of the agreement, Anacomp will continue to market Magnetics products to its direct customers for an initial term of two years. |
