Acquisition Expected to Strengthen Enterprise Maintenance Base
And to be Accretive Within the First Year
ALEXANDRIA, Va., July 25 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced that it has signed a non-binding letter of intent
to acquire all the outstanding common stock of a privately held company that
serves the Enterprise Maintenance Solutions marketplace.
Based on yesterday's closing price of Halifax stock, the market value of
the proposed transaction is approximately $2.9 million, subject to certain
possible adjustments. Under the letter of intent, Halifax would issue to the
selling shareholders approximately 500,000 shares of its outstanding common
stock, make a cash payment of $400,000, and issue notes in the principal
amount of $550,000, with an 18-month term, accruing interest at the rate of 5%
per annum. The sellers will have the ability to receive an additional
$250,000 subject to certain earn-out provisions tied to the achievement of
revenue growth targets.
The acquisition is expected to be accretive to earnings, and the
transaction, which is subject to satisfaction of various conditions and
approvals, is anticipated to close on or before August 29, 2003.
According to Charles McNew, president and chief executive officer, "Not
only do we expect this acquisition be accretive in the first year, but it
should also increase our second-half revenues by 15 to 20 percent. In concert
with our strategy of extending our leadership position in enterprise
maintenance solutions, the acquisition will significantly expand our
geographic base, strengthen our service delivery capabilities, and add
additional prestigious customers to our roster. This will also enhance our
ability to grow our partnership arrangements with the global service provider
community."
The Company also announced today that it has completed a private placement
in the amount of $1.2 million. Halifax issued approximately 292,000 shares of
common stock at current market prices to four members of the executive
management team, including McNew, as well as certain directors and one
existing shareholder of the Company. The private placement will include
warrants to purchase approximately 58,000 shares of common stock, at an
exercise price set at 20% above current market prices.
Founded in 1967, Halifax Corporation is an enterprise maintenance
solutions company providing a wide range of technology services to commercial
and government customers throughout the United States. The Company's
principal products are high availability hardware maintenance services,
technology deployment and integration services, and secure network program
services. More information on Halifax can be found at http://www.hxcorp.com.
Certain statements made by the Company which are not historical facts may
be considered forward-looking statements, including, without limitation,
statements as to trends, management's beliefs, views, expectations and
opinions, which are based upon a number of assumptions concerning future
conditions that ultimately may prove to be inaccurate. Such forward-looking
statements are subject to risks and uncertainties and may be affected by
various factors that may cause actual results to differ materially from those
in the forward-looking statements. For further information that could affect
the Company's financial statements, please refer to the Company's reports
filed with the Securities and Exchange Commission.
SOURCE Halifax Corporation
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Related links:
http://www.hxcorp.com
CONTACT:
Karen Vahouny, +1-703-744-7809, or
kvahouny@qorvis.com, for Halifax Corporation
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