Industrial Services of America, Inc. (NASDAQ: IDSA) (the
“Company” or “ISA”), a company that buys, processes and markets
ferrous and non-ferrous metals and other recyclable commodities,
today announced that it has entered into a definitive agreement to
sell substantially all of its assets (the “Transaction”) to River
Metals Recycling LLC (“River Metals”), a subsidiary of The David J.
Joseph Company.
The purchase price is $23,300,000, less certain payoff amounts
relating to taxes, encumbrances, and assumed capital leases, and is
subject to a net working capital adjustment. The Company expects
the net proceeds available for distribution to shareholders
following the payment of debt, transaction costs and other expenses
to be an estimated $1.15 to $1.35 per share, in one or more
distribution installments. The mid-point of this range represents a
70% premium to the Company’s closing stock price on the business
day immediately prior to this announcement and a 38% premium to the
Company’s average closing stock price over the past thirty trading
days. These estimates are subject to a number of factors, including
the Company’s operating results up until the closing.
The Transaction follows an extended process in which a special
committee of the Company’s board of directors explored strategic
alternatives available to the Company and evaluated sale
opportunities with the advice and assistance of its financial
advisor, Conway MacKenzie Capital Advisors LLC. The Transaction was
unanimously approved by the Company’s board of directors.
The Transaction is subject to satisfaction or waiver of closing
conditions set forth in the purchase agreement, including approval
by the Company’s shareholders. The Company will call and hold a
shareholders’ meeting seeking to obtain this approval. The closing
of the Transaction is also conditioned on the issuance of a storm
water permit and agreed order on terms not materially different
from those currently being discussed with the state agency in
connection with the Company’s efforts to ensure future compliance
with the stormwater permit at one of its facilities. The Company
expects the Transaction to close in late fourth quarter 2019 or
early first quarter 2020.
Although Todd Phillips, the Company’s CEO, is not expected to
join River Metals, River Metals intends to hire substantially all
of ISA’s employees immediately after the closing of the
Transaction.
The Company does not expect any changes for ISA’s valued
customers and suppliers. ISA will continue to operate in the normal
course until the Transaction closes.
Todd Phillips, the Company’s CEO, stated: “ISA has a long and
proud history, dating back to its founding by Harry Kletter in the
mid-1950s. I’m excited that the ISA legacy will live on within
River Metals and The David J. Joseph Company. As the consolidation
of the domestic steel recycling industry continues, our board, its
special committee and management became convinced that combining
the ISA business with River Metals will lead to the best outcome
for our shareholders, our employees, our customers and our
suppliers.”
The Company’s board of directors also unanimously adopted a Plan
of Dissolution (the “Plan of Dissolution”), which contemplates the
eventual sale of any remaining assets and a wind down of the
Company’s business affairs. Following closing of the Transaction
and payment of outstanding liabilities, along with other actions
specified in the Plan of Dissolution, including reserving for
contingent liabilities, the Company intends to distribute net
proceeds from the Transaction and Plan of Dissolution to its
shareholders in one or more distribution installments. The Plan of
Dissolution is subject to completion of the Transaction and
shareholder approval.
Further details on the Transaction and the Plan of Dissolution
are contained in the Company’s current report on Form 8-K filed on
or about the date of this press release. More information regarding
the Transaction and the Plan of Dissolution will be included in a
proxy statement that ISA intends to file with the Securities and
Exchange Commission (“SEC”) and distribute to shareholders. Such
proxy statement will include information regarding the timing of
the shareholders’ meeting to consider approval of the Transaction
and the Plan of Dissolution.
About ISA
Headquartered in Louisville, Kentucky, Industrial Services of
America, Inc., is a publicly traded company that buys, processes
and markets ferrous and non-ferrous metals and other recyclable
commodities, and buys used autos in order to sell used auto parts.
More information about ISA is available at www.isa-inc.com.
Important Information for Shareholders
Communications in this press release do not constitute a
solicitation of any vote or approval. In connection with the
Transaction and the Plan of Dissolution, the Company will be filing
documents with the SEC, including a proxy statement. Before making
any voting decision, Company shareholders are urged to read
carefully the proxy statement and any other relevant documents
filed by the Company with the SEC when they become available
because they will contain important information about the sale of
the assets and the Plan of Dissolution. This press release is not a
substitute for any proxy statement or any other document which the
Company may file with the SEC in connection with the proposed
transaction. You may obtain copies of all documents we file with
the SEC, free of charge, at the SEC’s website (www.sec.gov), on the Company’s website
(http://www.isa-inc.com/) under
“Investors”, or by sending a written request to the Company at
Industrial Services of America, Inc., 7100 Grade Lane, Louisville,
Kentucky 40213, Attn: Todd Phillips.
The Company and its directors and executive officers and certain
other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
Transaction and the Plan of Dissolution. You can find information
about the Company’s directors and executive officers in the
Company’s annual report on Form 10-K, as amended, for the year
ended December 31, 2018. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement and other relevant
materials to be filed with the SEC when they become available.
Shareholders can obtain free copies of these documents from the
Company using the contact information above.
Forward-Looking Statements
The statements in this press release that are not historical,
including without limitation statements regarding the Company’s
beliefs, expectations, prospects, strategic plans and statements
regarding the sale of the assets or other future transactions,
constitute “forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical fact should be
considered “forward-looking statements” for these purposes. In some
cases, forward-looking statements can be identified by the use of
such terminology as “may,” “will,” “expects,” “plans,”
“anticipates,” “intends,” “believes,” “estimates,” “potential,” or
“continues,” or the negative thereof or other similar words.
Although we believe that the expectations reflected in our
forward-looking statements are reasonable, we can give no assurance
that such expectations or any of our forward-looking statements
will prove to be correct. Examples of forward-looking statements
include, but are not limited to, those regarding the transactions
contemplated by the Asset Purchase Agreement and the Plan of
Dissolution. Forward-looking statements are subject to inherent
risks and uncertainties, and actual results and developments may be
materially different from those expressed or implied by the
forward-looking statements. Important factors that could cause
actual results to differ from those expressed or implied by the
forward-looking statements include the possibility that the
transactions contemplated by the Asset Purchase Agreement will not
close, including without limitation as a result of the failure to
satisfy the closing conditions, including failure of the Company to
obtain the required shareholder approval; that disruption from the
pending sale and dissolution may make it more difficult to maintain
business and operational relationships for the Company; that the
Company may not obtain shareholder approval of the Transaction and
the Plan of Dissolution; that the costs and reserves associated
with the Transaction and the Plan of Dissolution may be higher than
anticipated; that operating results of the Company are less
favorable than currently estimated by management, which would
negatively impact the amounts distributable to the shareholders;
that the length of time associated with the consummation of the
Transaction and the Plan of Dissolution may be longer than
anticipated for various reasons; and that the other anticipated
benefits from the sale of the assets and the Plan of Dissolution
will not be realized.
Further information on risks we face is contained in our filings
with the SEC, including our Form 10-K, as amended, for the fiscal
year ended December 31, 2018, and will be contained in our SEC
filings in connection with the sale of the assets and the Plan of
Dissolution. Any forward-looking statement made by us herein speaks
only as of the date on which it is made. Factors or events that
could cause our actual results to differ may emerge from time to
time, and it is not possible for us to predict all of them. Because
of these risks, uncertainties and assumptions, you should not place
undue reliance on these forward-looking statements. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190819005313/en/
Industrial Services of America, Inc. Todd L. Phillips,
502-366-3452 Chief Executive Officer, President and Chief Financial
Officer
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