ADDvantage Technologies Group,
Inc. (NASDAQ: AEY) (“ADDvantage Technologies” or
the “Company”) announced today that it will hold a special meeting
of the stockholders on May 29, 2019 at 9:00 a.m. CDT at the
Renaissance Tulsa Hotel and Convention Center, Tulsa, Oklahoma.
At the special meeting, stockholders will be
asked to consider and vote upon a proposal to authorize the sale of
ADDvantage Technologies’ Cable TV business to Leveling 8 (“the Sale
Transaction”), pursuant to the terms of the Stock Purchase
Agreement, dated as of December 26, 2018 and amended as of March
15, 2019. Specifically, under the Stock Purchase Agreement, the
Company has agreed to sell to Leveling 8 all of the outstanding
shares and limited liability company membership interests, as
applicable, of Tulsat, LLC (“Tulsat”), NCS Industries, Inc.
(“NCS”), Addvantage Technologies Group of Missouri, Inc.
(“ComTech”), Addvantage Technologies Group of Texas, Inc.
(“Tulsat-Texas”), and Tulsat-Atlanta, L.L.C. (“Tulsat-Atlanta”),
collectively referred to as the “Cable Companies”.
Subject to certain post-closing adjustments, the
purchase price that Leveling 8 will pay in the Sale Transaction is
$10,314,141, with $3,939,141 payable in cash at closing and
$6,375,000 million in a promissory note bearing interest at 6% per
annum, payable over five years and personally guaranteed by David
E. Chymiak. An affiliate of Mr. Chymiak paid ADDvantage
Technologies $5 million for the purchase of its Broken Arrow,
Oklahoma facility in November 2018 and $1.35 million for the
purchase of its Sedalia, Missouri facility in March 2019.
(The $1.35 million paid for the Sedalia, Missouri property is a
credit to the purchase price and down payment amounts stated
above.) Leveling 8 is 100% beneficially owned by Mr. Chymiak,
ADDvantage Technologies’ Chief Technology Officer and a member of
the Board of Directors and, until recently, Chairman of the Board
of Directors. Mr. Chymiak beneficially owns approximately 26% of
the outstanding common stock of ADDvantage Technologies. In
addition, Mr. Chymiak was one of the original founders of Tulsat in
1985. Mr. Chymiak will remain on the Company’s Board of
Directors subsequent to the Sale Transaction.
Joe Hart, President and CEO of the Company,
commented, “This sale, if approved, will conclude a year-long plus
effort by our Board of Directors to raise capital through the sale
of real estate and of our cable business and to invest that capital
into building a solid position in the telecommunications and
wireless services markets. This strategy is expected to generate a
higher return on investment for our stockholders.”
Mr. Hart continued, “For many years, our Board
of Directors has sought to diversify away from our original core
cable business and expand the Company’s range of solutions in the
telecommunications and wireless services market. This was due to
the general decline in the cable TV market, the specific decline of
our own cable business and the relatively low return on capital
investment generated by our cable business. In the past, we
conducted a market check and found little buyer interest in our
cable business. We then proceeded to capitalize on the growth
opportunity in the telecommunications and wireless services
businesses through several meaningful acquisitions: (i) Nave
Communications Company (“Nave”), engaged in the business of selling
telecommunications equipment and located in Jessup, Maryland, (ii)
Triton Datacom (“Triton”), engaged in the business of providing new
and refurbished networking products, including IP desktop phones,
and located in Miami, Florida, and (iii) our recently acquired
Fulton Technologies, engaged in the wireless services business and
located in Dallas, Texas.”
Mr. Hart concluded, “Upon completion of the Sale
Transaction, I believe we will be well-positioned to further invest
in our telecommunication businesses and achieve long term,
sustainable growth. Following the closing of the Sale Transaction,
the Company will continue to operate as an Oklahoma corporation
publicly traded on the NASDAQ Global Market. Importantly, the
completion of the proposed Sale Transaction will not affect your
share ownership of ADDvantage common stock.”
ADDvantage Technologies’ Board of Directors
established an independent committee of our Board of Directors,
referred to herein as the “strategic direction committee”, to
negotiate and approve or disapprove the Sale Transaction on behalf
of the Board of Directors. The strategic direction committee
acting on behalf of and with the approval of the Board of Directors
has (i) determined that the Stock Purchase Agreement and the Sale
Transaction are expedient and in the best interests of ADDvantage
and its stockholders, (ii) approved the Stock Purchase Agreement
and the Sale Transaction, and (iii) directed that the Sale
Transaction be submitted for consideration by the stockholders at
the special meeting. The Board of Directors (D. Chymiak abstaining)
has concurred with the approval by the strategic direction
committee with respect to the Sale Transaction and, together with
the strategic direction committee, recommends that stockholders
vote “FOR” the Sale Transaction.
A proxy statement was filed with SEC on April
17, 2019 and is being distributed to each of our stockholders.
We encourage each of our stockholders to read the entire
proxy statement, exhibits and annexes. Each stockholder can
vote in person, by mailing in the proxy card included with the
proxy statement, by proxy using a toll-free telephone number or the
Internet.
Each stockholder vote is important. The
Sale Transaction cannot be completed unless holders of a majority
of the (i) outstanding shares of common stock of ADDvantage vote in
favor of the approval of the Sale Transaction and (ii) outstanding
shares of common stock (excluding shares owned by David E. Chymiak
and his affiliates) vote in favor of the approval of the Sale
Transaction. Accordingly, if stockholders fail to vote in favor of
the Sale Transaction, the effect will be the same as a vote against
the Sale Transaction.
If you have any questions or need assistance
voting your shares, please call Saratoga proxy Consulting LLC at
(212) 257-1311 (collect) or (888) 368-0379 (toll free) or by email
at info@saratogaproxy.com.
About ADDvantage Technologies Group, Inc.
ADDvantage Technologies Group, Inc.
(NASDAQ: AEY) is a communications infrastructure services and
equipment provider operating a diversified group of
companies. Through Fulton Technologies, the Company provides
turn-key wireless infrastructure services including the
installation, modification and upgrading of equipment on
communication towers and small cell sites for wireless carriers,
national integrators, tower owners and major equipment
manufacturers. Through its Nave Communications, Triton
Datacom and cable television subsidiaries, ADDvantage sells
equipment and hardware used to acquire, distribute, and protect the
communications signals carried on fiber optic, coaxial cable and
wireless distribution systems, including high-speed data
(Internet), telephony and television programming. Through its
Nave subsidiary, ADDvantage offers repair services focused on
telecommunication equipment and recycles surplus and obsolete
telecommunications equipment. In addition, through its cable
television subsidiaries, ADDvantage operates a national network of
technical repair centers focused primarily on supporting cable
television equipment.
ADDvantage operates through its subsidiaries,
Fulton Technologies, Nave Communications, Triton Datacom, Tulsat,
Tulsat-Atlanta, Tulsat-Texas, NCS Industries and ComTech Services.
For more information, please visit the corporate web site
at www.addvantagetechnologies.com.
The information in this announcement may include
forward-looking statements. All statements, other than
statements of historical facts, which address activities, events or
developments that the Company expects or anticipates will or may
occur in the future, are forward-looking statements. These
statements are subject to risks and uncertainties, which could
cause actual results and developments to differ materially from
these statements. A complete discussion of these risks and
uncertainties is contained in the Company’s reports and documents
filed from time to time with the Securities and Exchange
Commission.
For further information |
KCSA Strategic Communications |
Company Contact: |
Elizabeth Barker |
Scott Francis (9l8) 25l-9121 |
(212) 896-1203 |
ebarker@kcsa.com |
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