Black Box Corporation Announces the Closing of the Sale of Its Federal Government IT Services Business
August 27 2018 - 4:41PM
Black Box Corporation (NASDAQ:BBOX), a leading digital solutions
provider, announced that it has closed on its previously announced
agreement to sell its Federal Government IT Services Business (the
“Federal Business”) to Arlington Capital Partners, a leading
private equity firm with a focus on businesses in government
services and other adjacent markets, for a cash purchase price of
$75 million. Arlington Capital Partners purchased 100% of the
equity interests of the Federal Business on a debt-free, cash-free
basis. Raymond James & Associates and Jones Day represented
Black Box in this transaction.
The net cash proceeds from the sale of the
Federal Business, after purchase price adjustments of $5.6 million,
transaction fees and expenses of $3.2 million as well as $3.0
million of funds deposited into escrow for the finalization of
certain closing items as well as certain indemnifications, were
used to pay Bank fees, interest on bank debt and indebtedness.
After fees and interest, the new $10 million LIFO senior
revolving credit facility was paid first and the Term Loan was paid
in full, with the remaining funds reducing the original Revolving
Credit Line. The LIFO line is available for future borrowings
(subject to continued compliance with the Credit Agreement).
“This was a critical step to give the company
options moving forward and reduces the debt to more manageable
levels,” said Joel Trammell, CEO of Black Box.
While the completion of the sale of the Federal
Business is a significant milestone for Black Box, the Company
continues to focus on exploring all other strategic alternatives
with the assistance of Raymond James and Jones Day to address its
liquidity needs including, among others, refinancing, restructuring
and the sale of other assets. This process reflects the continued
commitment of the Board of Directors of the Company to act in the
best interests of the Company and to maximize value for the
Company’s stockholders. While the Company is working expeditiously
to its next initiative, there can be no assurances that the Company
will be able to consummate any other strategic alternatives.
About Black Box Black Box
(NASDAQ:BBOX) is the trusted digital partner. With more than 40
years of experience connecting people and devices, we are dedicated
to helping clients embrace the intelligent edge and enable their
digital transformation. Our award-winning products and extensive
services connect you with your customers, your team, and the world.
Every day, our customers trust us to design, deploy, and manage
their digital needs including retail IoT solutions, healthcare, and
mission-critical control room infrastructures across commercial
enterprises and governmental organizations. With a global presence
and extensive team of technical experts, we make digital
transformation possible whether at one location or hundreds. To
learn more about Commercial Services and Government Solutions visit
bboxservices.com. To learn more about Technology Products Solutions
visit blackbox.com. Follow us on Twitter at @blackbox_ns.
Black Box® and the Double Diamond logo are
registered trademarks of BB Technologies, Inc.
Cautionary Forward-Looking
StatementsWhen included in this Form 8-K, the words
“expects,” “believes,” and “anticipates” and analogous expressions
are intended to identify forward-looking statements. One can also
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. Such statements are
inherently subject to a variety of risks and uncertainties that
could cause actual results to differ materially from those
projected. Although it is not possible to predict or identify all
risk factors, such risks and uncertainties may include, among
others: the statements related to the Company’s pursuit of other
strategic alternatives. Actual results could differ from those
projected due to numerous factors, including, without limitation,
the ability of the Company to consummate other strategic
alternatives. Additional risk factors are included in the Company’s
Annual Report on Form 10-K for the fiscal year ended March 31, 2018
and in the Company’s Current Report on Form 8-K filed on July 2,
2018. These forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and speak only as of the date of this Form 8-K. The
Company expressly disclaims any obligation or undertaking to
release publicly any updates or any changes in the Company’s
expectations with regard thereto or any change in events,
conditions or circumstances on which any statement is
based.
Contact: Black Box
CorporationDavid J. RussoExecutive Vice President, Chief Financial
Officer and TreasurerPhone: (724) 873-6788Email:
investors@blackbox.com
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