Danka Business Systems Announces Sale of Ameritrend Corporation
Press release from the issuing company
ST. PETERSBURG, Fla.---Sept. 5, 2001--Danka Business Systems, PLC today announced that it has closed the sale of Ameritrend Corporation, a wholly owned subsidiary of Danka Holding Company, to Method Products Corp. ("MPC''). Under the terms of the sale, MPC will pay $1,000,000 for all of the outstanding capital stock of Ameritrend, and will assume approximately $600,000 in liabilities. Danka will also retain certain assets which it expects will be liquidated for approximately $400,000 in net cash proceeds. Danka will use the proceeds of sale and disposition of Ameritrend assets to reduce debt under its newly executed senior bank credit facility.
Ameritrend is primarily engaged in the sale and service of telecommunication systems. Danka's CEO, Lang Lowrey, commented: "The Company has found a very enthusiastic Buyer for Ameritrend. We believe MPC to be a much better fit for Ameritrend's business and will provide a better opportunity for its employees. Ameritrend has become non-strategic to Danka's ongoing plans. This sale also fits with the Company's continuing strategy to aggressively reduce debt, and demonstrates that we are looking at every opportunity to further that strategy.''
Danka took a $6.9 million write-off of goodwill related to Ameritrend in its fourth quarter of Fiscal Year 2001, and an additional $1.5 million charge in the first quarter of Fiscal Year 2002 for expenses related to the proposed sale. Added Lowrey, "Obviously, this transaction gets us out from under the negative operational impact that Ameritrend has had on the Company's financial performance and allows us to further focus on our core businesses.''
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