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Non-Tech : The Source Information Mgmt Co.(SORC) -- Ignore unavailable to you. Want to Upgrade?

To: JanyBlueEyes who wrote (85)12/15/1998 10:08:00 PM
From: JanyBlueEyes  Read Replies (1) | Respond to of 121
News: Acquisition

The Source Information Management Company Announces Plans to Acquire Brand Manufacturing Corp. and Affiliated Companies

ST. LOUIS--(BUSINESS WIRE)--Dec. 15, 1998--The Source Information Management Company (NASD:SORC) today announced the signing of a binding letter of intent to acquire Brand Manufacturing Corp. ("Brand") and affiliated companies ("Affiliates"), a New York-based front-end marketing and manufacturing company.

Brand and Affiliates will be acquired for 3.4 million shares of Source's common stock, with a portion of said shares being issuable only upon shareholder approval. All shares issued pursuant to this transaction will be subject to a one-year lockup agreement with the Company and a two-year voting agreement in favor of Leslie Flegel to vote on election of directors and certain other matters; the agreement will be earlier terminated if the seller holds less than 10% of the outstanding common stock of the Company. Furthermore, the current composition of the Board of Directors will remain intact.

This follows the Company's December 2nd announcement of its letter of intent to acquire Yeager Industries, Inc. and its November 19th announcement of its letter of intent to acquire MYCO, Inc. and Chestnut Display Systems, Inc. As is the case with the previously announced transactions, this acquisition is subject to negotiation of definitive agreements, due diligence and other customary conditions.

Brand and Affiliates achieved revenues of approximately $19.6 million for the fiscal year ended March 31, 1998, with EBITDA of approximately $5.6 million for the same period. Results of the fiscal year ending March 31, 1999, are expected to equal or exceed the results of fiscal 1998.

Brand is a New York-based company servicing AHOLD Group, Kroger, Winn Dixie and other large- and mid-sized retail companies. The Affiliates include Vail Salvage Co., which contracts the removal of old fixtures and T.C.E. Corp., which is an in-house trucking company shipping fixtures throughout the United States.

Current forecasts indicate that Brand has overbooked its current capacity and the Source will now have the opportunity to utilize the other facilities to be purchased. While not a large percentage of the total wire manufacturing industry, this acquisition, combined with the previously announced acquisitions, is a significant factor in the manufacturing and positioning of front-end fixtures.

The combined revenues of the previously announced acquisitions, along with Brand and Affiliates, approximates $60 million, creating a critical mass of the annual $100 million front-end manufacturing sector. These acquisitions are expected to be accretive to earnings for the fiscal year ended January 31, 2000.

The Source Company, on a consolidated basis, is anticipating revenues for the fiscal year ending January 31, 2000, of approximately $75 million to $80 million, in excess of 700 employees and total assets in excess of $70 million.

Leslie Flegel, Chairman of the Board and Chief Executive Officer of the Source Company, stated: "This acquisition, combined with the previously announced acquisitions, completes the circle of providing our retail clients virtually all necessary decision-making information related to optimizing front-end merchandising, gathering information on product movement within the front-end, and ultimately providing the ability to custom manufacture these fixtures.

The vendor relationships of these acquired companies expands well beyond Source's historical base of magazine publishers. The ability to obtain this information now provides the retailers and all vendors at the front-end, the ability to communicate directly on Source's Interactive Communications Network ("ICN") platform.

In addition, Jim Gillis, Chief Executive Officer of Brand, will, upon closing, assume the position of President of The Source. Jim's background includes 15 years of experience in the front-end management and consumer product marketing industries and was a critical factor in the Source acquisition of Brand. Jim will be responsible for the integration of the four manufacturing companies acquired, as well as integrating and accessing the data into the Source's existing information management system. Jim will report to Bill Lee, who will now assume the title of Vice Chairman while remaining as Chief Operating Officer."

The Source Information Management Company (NASD:SORC) provides front-end rebate collection and information services to approximately 825 retailers in the United States and Canada via nine offices throughout the continent. The company's innovative technology and systems have enabled an expansion of its core retail display allowance business, bringing to the market both front-end management and interactive communications between vendors and retailers. With the planned acquisitions of MYCO, Inc., Chestnut Display, Inc., Yeager Industries, Inc. and Brand and Affiliates, Source will provide front-end fixture manufacturing, thus expanding service capabilities to its retailer and vendor clients.

Safe Harbor Statement

The information contained in this release includes statements regarding matters which are not historical facts (including statements regarding the plans, beliefs or expectations of The Source Information Management Company) which are forward-looking statements....

CONTACT: The Source Information Management Company
W. Brian Rodgers, 314/995-9040