Global Technovations, Inc. announced today that it has executed a definitive agreement to purchase the automotive technology-based manufacturing and distribution company previously described in its April 10, 2000 press release. In calendar 1999, the target acquisition company recorded pro forma revenues of approximately $84 million and had pro forma earnings before interest, taxes, depreciation and amortization of approximately $7.3 million (“EBITDA”). Consummation of the acquisition is contingent upon the Company obtaining acceptable financing terms. Specific terms of the acquisition, including the identity of the target, will not be disclosed until the closing, which is now expected to occur on or before July 31, 2000.
Will Willis, President and Chief Executive Officer of Global Technovations, Inc., stated, “We have worked diligently to get the definitive agreement executed. This process took longer than anticipated because of negotiations, which were necessary to restructure the terms of the original letter of intent to make deal-financing terms more favorable for GTI shareholders. We appreciate the efforts of the owners and management of the target company in getting this accomplished.”
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David Natan, Vice President and CFO of the Company, stated, “We have made significant progress in obtaining financing on terms necessary to close this transaction. Our goal is to purchase the target company and realize an immediate cash flow benefit from the target company. We remain optimistic that this can be accomplished.”
Mr. Willis concluded, “In addition to our work on this acquisition, we remain focused on our OSA-II business. The progress of our OSA-II business is very encouraging although closing deals are slower than we would have liked or anticipated. Our pending OSA-II agreements are with major companies whose evaluation-to-contract signing process is painstaking and under review by many departments within their organizations. This includes a significant OSA-II agreement we expect to enter into within the next few weeks.”
Global Technovations, Inc. develops, assembles, and markets the sophisticated, patented MotorCheck(TM) and TruckCheck(TM) On-Site Analyzer, “an oil analysis mini-lab in a box”, and distributes MightyClean 2000(TM), a proprietary hydrocarbon eating microbe cleaning product.
Forward-Looking Statements
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By GlobalDataThe forward-looking statements discussed in this press release relating to the Company’s expectations that (1) it will complete the acquisition of the target company described above, (2) it will receive an immediate cash flow benefit from the target company, and (3) it will enter into a significant OSA-II agreement within the next few weeks are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
The results anticipated by these forward-looking statements may not occur. These statements are subject to risks and uncertainties that could cause results to differ materially from those contemplated in the above forward-looking statements. Such risks and uncertainties include the following: (1) the ability of the Company to obtain acceptable financing of the target company, (2) the ability of the Company to maintain positive cash flow following closing and incoming new debt service, reduce the target’s costs to expand its business, and improve its profitability, (3) the continued reliability of the OSA technology over an extended period of time, (4) the acceptance of the OSA-II technology by the marketplace, (5) the general tendency of large corporations to slowly change from known technology to emerging new technology, (6) potential future competition from third parties that may develop proprietary technology, which either does not violate the Company’s proprietary rights or is claimed not to violate the Company’s proprietary rights, and (7) the decision by a large company not to enter into or delay entering into a significant OSA-II agreement. Investors should also consider information contained in documents filed by the Company with the Securities and Exchange Commission.
