Kaman Acquires MBT Holding Corp. as Part of Its Music Segment
August 05 2005 - 3:21PM
PR Newswire (US)
BLOOMFIELD, Conn., Aug. 5 /PRNewswire-FirstCall/ -- Kaman
Corporation (NASDAQ:KAMNA) announced today that it has paid
approximately $30 million, subject to a post-closing working
capital adjustment, to acquire the majority of the assets and
assume certain of the liabilities of MBT Holding Corp. and its
subsidiaries, more commonly known as Musicorp, a wholesale
distributor of musical instruments and accessories headquartered in
Charleston, South Carolina. The acquisition is expected to be
accretive to Kaman earnings in 2005. Kaman is the industry's
largest independent distributor of musical instruments and
accessories with warehouses in Bloomfield, Connecticut; Portland,
Tennessee; and Ontario, California. In addition to distributing
general musical products, Kaman's Music segment, with sales of
$79.4 million for the first half of 2005, owns or exclusively
represents many world-renowned brand names such as Ovation guitars,
Takamine guitars, Gretsch drums, Gibraltar drum hardware and Latin
Percussion hand drums. MBT is the second largest U.S. distributor
of musical instruments and accessories after Kaman with sales of
approximately $30 million for the first half of 2005, and with
warehouses in Charleston, South Carolina; Louisville, Kentucky;
Dallas, Texas; Reno, Nevada; and Rockville, Maryland. Prior to
2003, MBT is best known to most U.S. customers for its reliable and
user-friendly distribution operations functioning under the
Musicorp name. In 2003, MBT acquired two smaller wholesale
distribution companies, Midco International of Effingham, Illinois,
and M&A Sales of Rockville, Maryland. MBT will operate as a
separate unit within Kaman's Music segment. Paul Kuhn, chairman,
president and CEO of Kaman Corporation, said, "This acquisition
will put Kaman in a much stronger position to take advantage of
logistical, technological and operational efficiencies that are
demanded in this highly competitive market. Our goal is to become
an even closer partner with our customers, expand the market for
our proprietary brands, form new alliances and strengthen current
relationships with manufacturers and product suppliers." Bob
Saunders, president of Kaman Music, said, "The product offering and
the in-market delivery systems of our two companies, while being
somewhat different, are actually quite complementary. We anticipate
that our customers will find this acquisition fairly transparent
and dealers will continue to be called on by both the Kaman and the
MBT sales teams. Additionally, this acquisition will afford Kaman
Music the opportunity to expand our proprietary product offerings
beyond what we are currently able to achieve with one sales team
alone." Dan Mahoney, president of MBT, added, "The marriage of
Kaman Music and MBT is a natural one. With so much consolidation
going on in the music business today, it is logical that our
combined companies will be better able to serve our customers'
needs than two individual companies standing alone. The combined
warehouse space of the two companies exceeds 600,000 square feet.
Kaman has a tremendous IT department that will help electronically
link all our customers directly into our inventories. Our sales
team is eager to continue to grow MBT on its already firm
foundation." Kaman Corporation is headquartered in Bloomfield,
Conn. and conducts business in the aerospace, industrial
distribution and music markets. Forward-Looking Statements This
release may contain forward-looking information relating to the
corporation's business and prospects, including the aerospace,
industrial distribution and music businesses, operating cash flow,
the benefits of the recapitalization transaction, and other matters
that involve a number of uncertainties that may cause actual
results to differ materially from expectations. Those uncertainties
include, but are not limited to: 1) the successful conclusion of
competitions for government programs and thereafter contract
negotiations with government authorities, both foreign and
domestic; 2) political conditions in countries where the
corporation does or intends to do business; 3) standard government
contract provisions permitting renegotiation of terms and
termination for the convenience of the government; 4) economic and
competitive conditions in markets served by the corporation,
particularly defense, commercial aviation, industrial production
and consumer market for music products, as well as global economic
conditions; 5) satisfactory completion of the Australian
SH-2G(A)program, including successful completion and integration of
the full ITAS software; 6) receipt and successful execution of
production orders for the JPF U.S. government contract including
the exercise of all contract options and receipt of orders from
allied militaries, as both have been assumed in connection with
goodwill impairment evaluations; 7) satisfactory resolution of the
EODC/University of Arizona litigation; 8) achievement of enhanced
business base in the Aerospace segment in order to better absorb
overhead and general and administrative expenses, including
successful execution of the contract with Sikorsky for the BLACK
HAWK Helicopter program; 9) satisfactory results of negotiations
with NAVAIR concerning the corporation's leased facility in
Bloomfield, Conn.; 10) profitable integration of acquired
businesses into the corporation's operations; 11) changes in
supplier sales or vendor incentive policies; 12) the effect of
price increases or decreases; 13) pension plan assumptions and
future contributions; 14) continued availability of raw materials
in adequate supplies; 15) satisfactory resolution of the supplier
switch and incorrect part issues at Dayron and the DCIS
investigation; 16) cost growth in connection with potential
environmental remediation activities related to the Bloomfield and
Moosup facilities; 17) successful replacement of the Corporation's
current revolving credit facility; 18) whether the proposed
recapitalization is completed; 19) risks associated with the course
of litigation; 20) changes in laws and regulations, taxes, interest
rates, inflation rates, general business conditions and other
factors; 21) the effects of currency exchange rates and foreign
competition on future operations; and 22) other risks and
uncertainties set forth in Kaman's annual, quarterly and current
reports, and proxy statements. Any forward-looking information
provided in this release should be considered with these factors in
mind. The corporation assumes no obligation to update any
forward-looking statements contained in this release. DATASOURCE:
Kaman Corporation CONTACT: Russell H. Jones, SVP, Chief Investment
Officer & Treasurer, Kaman Corporation, +1-860-243-6307, Web
site: http://www.kaman.com/ Company News On-Call:
http://www.prnewswire.com/comp/480450.html
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