EXHIBIT 99.1
Published on March 17, 2000
EXHIBIT 99.1
SunSource Forms Partnership With Glencoe Capital
Company Receives $105 Million in Cash Proceeds
PHILADELPHIA, March 2 /PRNewswire/ -- SunSource Inc. (NYSE: SDP - news, SDP.PR -
news; the "Company" or "SunSource") announced today that it has completed an
agreement with a newly-formed partnership affiliated with Glencoe Capital,
L.L.C. ("Glencoe") of Chicago, a private equity investment firm. The new
partnership will be jointly owned by SunSource and Glencoe. SunSource
contributed its expediter businesses comprising Kar Products, Inc. and A&H Bolt
& Nut Company Limited (collectively, "Kar") and Glencoe contributed cash equity
to the new partnership, GC Sun Holdings, L.P.
Maurice P. Andrien, Jr., SunSource President and Chief Executive Officer, said
that the Company received about $105 million in cash proceeds from the
transaction and will hold a 49% interest in the Partnership. Affiliates of
Glencoe will hold a 51% controlling interest in and will manage the Partnership.
Andrien commented that "the business venture with Glencoe provides a growth
opportunity for the Kar business while enabling SunSource to pursue strategic
initiatives centered around its core businesses. The Kar transaction with
Glencoe, along with the December 1999 debt refinancing and the Company's
recently announced plan to sell its Harding Glass subsidiary, continues
management's focus on streamlining its operations."
David S. Evans, President and Chief Executive Officer of Glencoe, stated that
Glencoe is very excited to implement its strategic growth plan for Kar in
conjunction with its Executive Network Group.
Kar had earnings before interest, taxes, depreciation and amortization of almost
$20 million in 1999, adjusted for non-recurring items, on revenues of about $125
million. SunSource will account for its investment in the Partnership on a
de-consolidated basis and expects to record a pre-tax gain on the Kar
transaction of about $55 million excluding transaction expenses.
The transaction also restores SunSource's stockholders equity to a significant
positive position of over $33 million or about $5.00 per common share from its
deficit position of $17 million at December 31, 1999.
SunSource Inc. is one of the nation's leading providers of value-added services
and products to retail and industrial markets in North America. The Company's
Industrial Services businesses provide parts supply, engineering and repair
services throughout the U.S., Canada and Mexico. Kar Products offers
distribution of maintenance and repair parts and personalized inventory
management services. The Hillman Group is a leading provider to hardware outlets
of merchandising systems, in-store service work and small parts such as
fasteners, letters, signs and keys.
Glencoe Capital L.L.C. invests capital on behalf of private investors, pension
funds and insurance companies. Glencoe is supported by its proprietary Executive
Network which consists of over forty Fortune 1000 CEOs and COOs, successful
entrepreneurs and executives with highly specialized skills. The Executive
Network is divided into six specialty groups, each led by a chairman with 25
plus years of business leadership experience.
This press release contains statements by the Company that involve risks and
uncertainties and may constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements reflect
management's current views and are based upon certain assumptions relating to
the success of acquisitions, integration plans, strategic growth plans and
overall economic conditions. Actual results could differ materially from those
currently anticipated as a result of a number of factors, including the risks
and uncertainties discussed under the captions "Risk Factors" -- Risks
Associated with Acquisitions set forth in Item I of the Company's Annual Report
on Form 10-K for the year ended December 31, 1998, as filed with the Securities
and Exchange Commission. Given these uncertainties, current or prospective
investors are cautioned not to place undue reliance on any such forward-looking
statements. Furthermore, the Company disclaims any obligation or intent to
update any such forward-looking statement to reflect future events or
developments.
For more information on the Company, please visit
www.prnewswire.com/comp/115271.html.