Velocity Express Signs Definitive Agreement To Acquire CD&L, Inc.
05 Juli 2006 - 3:19PM
PR Newswire (US)
Merger Will Make Velocity The Market Leader In Time-Critical
Logistics Solutions WESTPORT, Conn., July 5 /PRNewswire-FirstCall/
-- Velocity Express Corporation (NASDAQ:VEXP) and CD&L, Inc.
(AMEX:CDV) today announced that they had signed a definitive
agreement for Velocity to acquire CD&L, Inc. in a
fully-financed, two-step, all cash transaction for $3.00 per share.
The acquisition will make Velocity the largest time-critical
logistics company in North America, with more than $450 million in
annual revenues and 5,500 independent contractor drivers, operating
from 150 locations in leading markets across the United States and
Canada. "This transaction makes enormous economic and operating
sense, and will enable us to fully capitalize on the many
capabilities of both companies," said Vincent Wasik, Chairman and
CEO of Velocity Express. "Velocity Express and CD&L operate in
many of the same geographies and serve similar Fortune 500 and
local customers, utilizing a proven independent-contractor business
model. The combination of the two companies will allow Velocity to
leverage its technology and operating infrastructure across
CD&L's diverse and loyal customer base and to identify and
deploy 'best practices' representing the operating strengths of
both companies. The Company will be strongly positioned financially
to satisfy the national logistics needs of corporations looking for
an outsourced service provider in the time critical market, and
also one devoted to the highest levels of customer care." Al Van
Ness, Chairman and CEO of CD&L said, "This transaction
recognizes the value that has been created in CD&L. It is
rewarding to know that the CD&L Management that were
responsible for CD&L's success will be partnering with the key
people at Velocity in order that the combined company will be able
to create the same value proposition for the shareholders of the
combined entity and the enlarged customer base. I am sure, under
the stewardship of Mr. Wasik, that the shareholder valuation and
customer care will be maximized." "Velocity Express has assembled a
strong integration team comprised of members of Velocity Express,
CD&L, and consultants from Alvarez & Marsal to ensure a
smooth transition and rapid value creation to shareholders," said
Mr. Wasik. With the combined company, route density will be
enhanced, providing existing as well as new customers with a
competitive service offering. The Company also believes that it
will be able to gain numerous operating efficiencies as it
eliminates many duplicate costs. As part of the integration,
CD&L Board Director Thomas E. Durkin III has been named Lead
Integration Director of CD&L. During the transition period,
prior to formal shareholder approval, Durkin will coordinate
integration efforts on the CD&L end. Once shareholder approval
is complete, Durkin will be asked to join the combined company's
Board and continue to play an integral role in the integration. A
key element in the acquisition will be the strengthening of
Velocity's excellent managerial team with the addition of the
senior management team from CD&L, as well as a talented sales
and operational team. Bill Brannan (President and COO), Michael
Brooks (Group President), Russ Reardon (CFO), and Mark Carlesimo
(General Counsel), all will be joining Velocity in key executive
positions. Mr. Wasik stated, "Our vision is to double the size of
the company within the next few years as we use our proprietary
track and trace technology and electronic signature capture,
together with our industry- leading service metrics, to satisfy the
time critical demands of customers in industry sectors such as
healthcare, retail, service parts replenishment and financial
institutions." Velocity has acquired in private transactions
CD&L convertible securities that account for 49% of that
company's common shares and executed voting agreements with fewer
than ten selling note holders holding an additional 8% of CD&L
common shares to vote their shares in favor of a merger with
Velocity Express Corporation. Velocity has agreed to certain
restrictions on its ability to exercise its voting rights to enable
CD&L's Board to exercise its fiduciary duties. A meeting of
CD&L shareholders will be held for the purpose of approving the
Merger. A date for the meeting has not been set. There are
approximately 22 million fully diluted shares of CD&L. The
combined entity will operate under the Velocity Express name and be
headquartered in Westport, CT. The transaction is anticipated to
close in mid August. In connection with the signing of the
acquisition agreement, the Company sold 4 million shares of its
Series Q Convertible Preferred Stock for a total consideration of
$40 million and 75,000 units of its 12% Senior Secured Notes due
2010 for a total consideration of $70.7 million. The 12% Senior
Secured Notes consist of a Note with a face value of $1,000 and 345
Warrants to purchase Velocity Express common shares at an exercise
price of $1.45 per share. Simultaneously with this financing, the
Company paid off and terminated its revolving credit facility and
Senior Subordinated Note. Velocity Express Corporation Velocity
Express has one of the largest time definite nationwide delivery
networks, providing a national footprint for customers desiring
same day service throughout the United States. The Company's
services are supported by a customer-focused technology
infrastructure, providing customers with the reliability and
information they need to manage their transportation and logistics
systems, including a proprietary package tracking system that
enables customers to view the status of any package via a flexible
web reporting system. Visit http://www.velocityexpress.com/ for
more information. About CD&L, Inc. CD&L, Inc. operates from
98 locations in 25 states, including operations in 28 customer
owned facilities, providing last mile delivery solutions to various
industries. The company has over 1,500 employees and utilizes
approximately 2,900 independent contractor drivers to provide
time-sensitive delivery services to thousands of customers across
the country. For purposes of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, readers should be
aware that this press release includes certain "forward-looking
statements" that involve risks and uncertainties that could cause
actual results to differ materially. These statements are typically
preceded by words such as "believes," "expects," "anticipates,"
"intends," "will," "may," "should," or similar expressions. Such
statements are based upon, among other things, assumptions made by,
and information currently available to, management, including
management's own knowledge and assessment of the industry in which
Velocity and CD&L operate. Factors that may cause actual
results to differ materially from those expressed or implied by
such forward-looking statements include, but are not limited to,
the risk of successful integration of the two companies, the
ability to achieve enhanced route density, the ability to retain
customers, independent contractors and employees, the ability to
achieve operating efficiencies and eliminate duplicate costs, the
ability to double the size of the company, as well as the risks and
uncertainties detailed from time to time in the Velocity Express
and CD&L's filings with the Securities and Exchange Commission,
including their most recently filed reports on Form 10-Q and 10-K.
Velocity Express and CD&L disclaim any obligations to update
any forward- looking statement as a result of developments
occurring after the date of this press release or to conform them
to actual results. NOTE: In connection with the proposed merger,
CD&L intends to file a proxy statement and other relevant
materials with the Securities and Exchange Commission (the "SEC").
CD&L's stockholders are urged to read the proxy statement (and
all amendments and supplements to it) and other materials when they
become available because they contain important information.
CD&L's stockholders will be able to obtain free copies of the
proxy statement, when it becomes available, as well as the other
relevant materials, without charge, at the SEC's Web site
(http://www.sec.gov/). Copies of CD&L's filings may also be
obtained without charge from CD&L at CD&L's Web site
(http://www.cdl.net/) or by directing a request to CD&L, Inc.,
Secretary, 80 Wesley Street, South Hackensack, New Jersey 07606.
CD&L and its directors and executive officers and other members
of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger.
Information regarding CD&L's directors and executive officers
is available in CD&L's 2005 Annual Report on Form 10-K filed
with the SEC on April 4, 2006 and CD&L's proxy statement for
its 2006 annual meeting of stockholders, filed with the SEC on
April 28, 2006. Additional information regarding the interests of
such potential participants will be included in the proxy
statement, and the other relevant documents filed with the SEC when
they become available. DATASOURCE: CD&L, Inc. CONTACT: Edward
W. (Ted) Stone, +1-203-349-4199, ; or Steven S. Anreder,
+1-212-532-3232, both for Velocity Express, Inc.; or Russell
Reardon of CD&L, +1-201-487-7740, Web site: http://www.cdl.net/
http://www.velocityexpress.com/
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