DSTR ya know I think a person could almost make a good living just playing this one, week in, week out. They have news yesterday.
DualStar Announces Proposed Convertible Preferred Stock Investments
THURSDAY, JUNE 15, 2000 6:32 PM
- BusinessWire
NEW YORK, Jun 15, 2000 (BUSINESS WIRE) --
- Exelon Capital Partners to Make $55 Million Investment -
- Blackacre Capital Management to Make $20 Million Investment -
DualStar Technologies Corporation ("DualStar" or the "Company") (Nasdaq:DSTR) announced today that
Exelon Capital Partners, Inc. ("Exelon"), a subsidiary of PECO Energy Company (NYSE:PE), has entered
into a letter of intent with DualStar to invest $55 million in DualStar. The investment will consist of the
purchase of 10,476,190 shares of newly-issued convertible preferred stock of DualStar (the "Convertible
Preferred Stock"), at a purchase price of $5.25 per share, and is subject to, among other things, definitive
documentation, as well as regulatory and DualStar stockholder approval.
The proposed Convertible Preferred Stock will be convertible into DualStar common stock at an initial
conversion rate of one-to-one. It is anticipated that Exelon will own approximately 26% of the issued and
outstanding DualStar common stock at the time of closing the transaction (assuming full conversion of the
Convertible Preferred Stock). The Convertible Preferred Stock will also bear a cumulative pay-in-kind dividend
at the annual compound rate of 5%. Dividends will be payable only in the event that DualStar fails to meet an
agreed-upon financial performance goal within 3 years from the date of issuance. Holders of the Convertible
Preferred Stock will be entitled to a liquidation preference equal to the original issuance price plus accrued
and unpaid dividends. The Convertible Preferred Stock is automatically converted into DualStar common stock
upon achievement of the financial performance goal within such three-year period.
In connection with the consummation of the proposed investment, Exelon would be entitled to designate a
majority of the DualStar Board of Directors. It is further contemplated that the parties would enter into a series
of strategic alliances.
DualStar also announced that it has entered into a letter of intent with Blackacre Capital Management L.L.C.
providing for a $20 million investment, on terms substantially similar to the Exelon investment. The $20 million
investment will replace the previously announced $46.2 million investment by Blackacre in DualStar. Under
the Blackacre letter of intent, which is also subject to, among other things, the execution of definitive
agreements with Exelon, as well as regulatory and DualStar stockholder approval, Blackacre will purchase
5,000,000 shares of Convertible Preferred Stock at a purchase price of $4.00 per share. Blackacre will have
the right to designate one member to the DualStar Board of Directors. The letter of intent further provides that
in the event that DualStar and Exelon do not enter into definitive agreements with respect to the Exelon
investment, Blackacre will loan DualStar $20 million on a senior secured basis, which loan will be convertible,
at the option of Blackacre, into DualStar common stock at $4.00 per share.
DualStar intends to use the proceeds of the investments primarily for general working capital necessary for
the implementation of a nationwide broadband access services business by DualStar Communications, Inc., a
wholly owned subsidiary of DualStar.
DualStar has begun to prepare definitive documentation and a proxy statement for use in soliciting DualStar
stockholders, and anticipates consummating the proposed investments during the third calendar quarter of
2000. The Company intends to seek such stockholder approval at its previously-postponed annual meeting,
which it also plans to hold during the third calendar quarter of 2000. The Company can make no assurances
that such conditions will be met.
About DualStar
DualStar Technologies Corp., through its subsidiaries, designs and installs infrastructure systems and
provides services that control and enhance the environment in buildings. DualStar's communications
subsidiaries, DualStar Communications, Inc. and ParaComm, Inc. provide 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 (MSO), and high-speed Internet access as an Internet Service Provider
(ISP). Other DualStar subsidiaries, including Centrifugal/Mechanical Associates, Inc., High-Rise Electric, Inc.
and Integrated Controls Enterprises, Inc., provide services governing heating, ventilation and air conditioning
(HVAC), electrical contracting, building control and energy management (BMS), 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. DualStar's common stock is
traded on The Nasdaq National Market under the symbol DSTR.
This press release and the materials referred to herein contain forward-looking statements regarding
DualStar's business and future plans of operations. When used herein, the words "intends," "expects,"
"plans," "estimates," "projects," "believes," "anticipates," "contemplates," "represents" and similar
expressions are intended to identify forward-looking statements. Forward-looking statements involve known
and unknown risks and uncertainties. DualStar's ability to satisfy the various conditions contained in the
above-referenced letters of intent with Exelon Capital Partners, Inc. and Blackacre Capital Management
L.L.C., the consummation of the proposed investments and the ability of DualStar management to
successfully implement its business plan, as well as other important factors set forth in DualStar's periodic
filings with the Securities and Exchange Commission (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 DualStar disclaims any obligation to provide public updates, revisions or amendments to
any forward-looking statements made herein to reflect changes in DualStar's expectations or future events.
CONTACT: DualStar Technologies Corp., New York
Jared E. Abbruzzese, Chairman
Robert J. Birnbach, Chief Financial Officer
Voice: 718/340-6655
Fax: 212/616-6254
e-mail: info@dualstar.com |
