Jan. 10 - PLM Group has entered into an agreement to divest certain non-core operating assets of PLM America, a move that will enhance future financial performance and still allow the Company to maintain a strategic presence in the United States.
Packaging and Fulfillment service revenues generated by the assets being sold represent less than 3% of PLM Group consolidated revenues.
Under terms of the transaction, which is expected to close in February 2002, PLM will divest the assets to a private company controlled by PLM America's General Manager, and take back a note secured by a first charge on the assets. In addition, the private company will issue convertible shares to PLM, which will hold a minority position in the ongoing entity. The total transaction is valued at the book value of the assets sold, approximately US$580,000. This means that no significant gain or loss will be recorded as a result of this transaction.
"This divestiture accomplishes three objectives," said Barry N. Pike, PLM Chairman and Chief Executive Officer. "It allows us to sharpen PLM's focus on its core capabilities. "By maintaining a presence in Cincinnati, we will remain well-positioned for future U.S. commercial printing assignments. "The new structure of PLM America will afford PLM the ability to effectively utilize the tax losses ($1.5 million u.s.) accumulated over the past three years."
Mr. Pike added that PLM was very happy to have been able to "support the current PLM America management in establishing their own business" and that PLM would maintain a strategic relationship with the new company with regard to print sales representation and Packaging and Fulfillment services for PLM's customers.
The private company purchasing the assets is headed by PLM America's current General Manager, Arnold Ziroli. Mr. Ziroli has revitalized PLM America in the past year by refocusing the business on the display and fulfillment markets.
"Arnold has done a wonderful job in transforming the business," said Mr. Pike. "However, to do so, Arnold has had to pursue lines of business that are not synergistic with PLM's core operations. We believe this transaction will benefit both parties by allowing PLM to pursue its core business objectives and to allow the new company to pursue business opportunities in its own market without limitation. Arnold's business will no doubt become a leading player in the local market for display and fulfillment, while PLM -- through PLM America and our fully equipped operations in Markham -- will continue to pursue its objective of being a leader in profitable niches of the North American commercial printing industry. We wish Arnold every success."
Said Mr. Ziroli: "I'm very excited by the prospect presented by this transaction. There are many companies in the region that could benefit from the kind of high quality, rapid response service we can bring. We intend to hit the ground running as soon as the transaction is closed."
PLM Group Ltd. is one of Canada's largest commercial printers - - with a growing presence in the United States -- providing single source web and sheet-fed print, visual, graphics and display services to leading companies in a number of industries, including financial services, automotive, pharmaceutical, healthcare and communications. Visit the Company's web site at www.plmgroup.com
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