Black Box Corporation Announces Definitive Agreement for the Sale of Its Federal Government IT Services Business
August 18 2018 - 9:00AM
Black Box Corporation (NASDAQ:BBOX), a leading digital solutions
provider, announced that it has entered into a definitive agreement
to sell its Federal Government IT Services Business (the “Federal
Business”) to a private equity firm for a cash purchase price of
$75 million. The buyer has agreed to purchase 100% of the
equity interests of the Federal Business on a debt-free, cash-free
basis. Consummation of the transaction is subject to
customary closing conditions and the parties anticipate a closing
on or before August 31, 2018. Raymond James &
Associates and Jones Day are representing Black Box in this
transaction.
As previously disclosed, the Second Amendment
dated June 29, 2018 to Black Box’s Credit Agreement dated May 9,
2016, as amended (the “Credit Agreement”), requires that Black Box
satisfy certain milestones related to the sale of the Federal
Business, including the execution of this definitive agreement and
the consummation of the sale by August 31, 2018 (subject to
extension by the Agent under the Credit Facility). The net
proceeds of the sale of the Federal Business, after fees, costs,
expenses and accrued interest under the Credit Facility, will be
used to pay down all outstanding indebtedness under the new
$10 million LIFO senior revolving credit facility, which will
then remain available for future borrowings (subject to continued
compliance with the Credit Agreement). The remainder of the
net proceeds will be used to pay down other indebtedness under the
Credit Agreement.
While the entry into a definitive agreement for
the sale of the Federal Business is a significant milestone for
Black Box, the Company also remains focused on exploring all other
strategic alternatives with the assistance of Raymond James and
Jones Day to address its liquidity needs including, among others,
refinancing, restructuring and the sale of some or all of the
remaining businesses of the Company. This process reflects
the continued commitment of the Board of Directors of the Company
to act in the best interests of the Company and to maximize value
for the Company’s stockholders.
While the Company is working expeditiously to
consummate the sale of the Federal Business and on other strategic
alternatives, there can be no assurances that the sale of the
Federal Business will be consummated or that the Company will be
able to consummate any other strategic alternatives.
As previously announced, the Company will
release its first quarter of Fiscal 2019 financial results on
Monday, August 20, 2018. The Company plans to issue a
press release announcing its results before the market opens.
A conference call will follow at 9:00 a.m. Eastern Time, hosted by
Joel Trammell, President and Chief Executive Officer of Black Box
Corporation.
About Black Box Black Box
(NASDAQ:BBOX) is the trusted digital partner. With more than 40
years of experience connecting people and devices, we are dedicated
to helping clients embrace the intelligent edge and enable their
digital transformation. Our award-winning products and extensive
services connect you with your customers, your team, and the world.
Every day, our customers trust us to design, deploy, and manage
their digital needs including retail IoT solutions, healthcare, and
mission-critical control room infrastructures across commercial
enterprises and governmental organizations. With a global presence
and extensive team of technical experts, we make digital
transformation possible whether at one location or hundreds. To
learn more about Commercial Services and Government Solutions visit
bboxservices.com. To learn more about Technology Products Solutions
visit blackbox.com. Follow us on Twitter at @blackbox_ns.
Black Box® and the Double Diamond logo are
registered trademarks of BB Technologies, Inc.
Cautionary Forward-Looking
Statements
When included in this Form 8-K, the words
“expects,” “believes,” and “anticipates” and analogous expressions
are intended to identify forward-looking statements. One can also
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. Such statements are
inherently subject to a variety of risks and uncertainties that
could cause actual results to differ materially from those
projected. Although it is not possible to predict or identify all
risk factors, such risks and uncertainties may include, among
others: the consummation of the sale of the Federal Business
and statements related to the Company’s pursuit of other strategic
alternatives. Actual results could differ from those
projected due to numerous factors, including, without limitation,
the parties’ ability to successfully complete the sale of the
Federal Business; the timing for completion; unanticipated delays
and transaction expenses; and the ability of the Company to
consummate other strategic alternatives. Additional risk
factors are included in the Company’s Annual Report on Form 10-K
for the fiscal year ended March 31, 2018 and in the Company’s
Current Report on Form 8-K filed on July 2, 2018. These
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and speak only as of the date of this Form 8-K. The Company
expressly disclaims any obligation or undertaking to release
publicly any updates or any changes in the Company’s expectations
with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
Contact:
Black Box CorporationDavid J. RussoExecutive Vice President,
Chief Financial Officer and TreasurerPhone: (724) 873-6788Email:
investors@blackbox.com
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