Veri-Tek Finalizes Manitex Purchasing Agreement
Veri-Tek International, Wixom, Mich., a company that designs and builds specialty equipment for the automotive and heavy equipment industry, announced it has signed a definitive agreement to purchase all the outstanding equity of Manitex, Georgetown, Texas, from Quantum Value Management.
The agreement provides for total consideration of approximately $35 million, which shall be paid by delivering 234,875 shares of Veri-Tek's common stock and a promissory note for approximately $1.4 million, which is subject to adjustment based on the trading price of Veri-Tek's common stock at the closing. The remaining portion of the consideration is composed of Veri-Tek's assumption of approximately $33 million of Manitex indebtedness.
The purchase price is subject to working capital adjustments. Pursuant to the terms of the purchase agreement, Veri-Tek will enter into an employment agreement with David Langevin, chief executive officer of Manitex, where he will serve as the chief executive officer of Veri-Tek.
Donald Brown, Veri-Tek's president, said the company is excited to complete the acquisition of Manitex. “[Manitex] will provide us with a strong revenue and earnings base," he added. "Their manufacturing success will supplement our growing line of testing and manufacturing equipment.” Manitex's growth is evidenced by its revenue increase from approximately $38 million in 2003 to approximately $62 million in 2005.
"We are pleased to introduce our line of products to the Veri-Tek family,” said David Langevin, Manitex's chief executive officer. “We continue to experience strong demand for our products, as evidenced by our backlog. Manitex has bright prospects for the future, including our growing application in the energy sector. We believe that Veri-Tek's ability to access the capital markets will allow for strong growth and development of the combined company."
The transaction is expected to close in early June and is subject to customary closing conditions. J Giordano Securities Group acted as financial advisor to Veri-Tek in connection with the transaction and rendered a fairness opinion to the board of directors of Veri-Tek.