CD & L S2 (AMEX:CDV)
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From May 2019 to May 2024
Velocity Express Corporation (NASDAQ: VEXP) and CD&L,
Inc. (AMEX:CDV) today announced that they had signed a definitive
agreement for Velocity to acquire CD&L, Inc. in a fully-financed,
two-step, all cash transaction for $3.00 per share. The acquisition
will make Velocity the largest time-critical logistics company in
North America, with more than $450 million in annual revenues and
5,500 independent contractor drivers, operating from 150 locations in
leading markets across the United States and Canada.
"This transaction makes enormous economic and operating sense, and
will enable us to fully capitalize on the many capabilities of both
companies," said Vincent Wasik, Chairman and CEO of Velocity Express.
"Velocity Express and CD&L operate in many of the same geographies and
serve similar Fortune 500 and local customers, utilizing a proven
independent-contractor business model. The combination of the two
companies will allow Velocity to leverage its technology and operating
infrastructure across CD&L's diverse and loyal customer base and to
identify and deploy 'best practices' representing the operating
strengths of both companies. The Company will be strongly positioned
financially to satisfy the national logistics needs of corporations
looking for an outsourced service provider in the time critical
market, and also one devoted to the highest levels of customer care."
Al Van Ness, Chairman and CEO of CD&L said, "This transaction
recognizes the value that has been created in CD&L. It is rewarding to
know that the CD&L Management that were responsible for CD&L's success
will be partnering with the key people at Velocity in order that the
combined company will be able to create the same value proposition for
the shareholders of the combined entity and the enlarged customer
base. I am sure, under the stewardship of Mr. Wasik, that the
shareholder valuation and customer care will be maximized."
"Velocity Express has assembled a strong integration team
comprised of members of Velocity Express, CD&L, and consultants from
Alvarez & Marsal to ensure a smooth transition and rapid value
creation to shareholders," said Mr. Wasik. With the combined company,
route density will be enhanced, providing existing as well as new
customers with a competitive service offering. The Company also
believes that it will be able to gain numerous operating efficiencies
as it eliminates many duplicate costs. As part of the integration,
CD&L Board Director Thomas E. Durkin III has been named Lead
Integration Director of CD&L. During the transition period, prior to
formal shareholder approval, Durkin will coordinate integration
efforts on the CD&L end. Once shareholder approval is complete, Durkin
will be asked to join the combined company's Board and continue to
play an integral role in the integration.
A key element in the acquisition will be the strengthening of
Velocity's excellent managerial team with the addition of the senior
management team from CD&L, as well as a talented sales and operational
team. Bill Brannan (President and COO), Michael Brooks (Group
President), Russ Reardon (CFO), and Mark Carlesimo (General Counsel),
all will be joining Velocity in key executive positions. Mr. Wasik
stated, "Our vision is to double the size of the company within the
next few years as we use our proprietary track and trace technology
and electronic signature capture, together with our industry-leading
service metrics, to satisfy the time critical demands of customers in
industry sectors such as healthcare, retail, service parts
replenishment and financial institutions."
Velocity has acquired in private transactions CD&L convertible
securities that account for 49% of that company's common shares and
executed voting agreements with fewer than ten selling note holders
holding an additional 8% of CD&L common shares to vote their shares in
favor of a merger with Velocity Express Corporation. Velocity has
agreed to certain restrictions on its ability to exercise its voting
rights to enable CD&L's Board to exercise its fiduciary duties. A
meeting of CD&L shareholders will be held for the purpose of approving
the Merger. A date for the meeting has not been set. There are
approximately 22 million fully diluted shares of CD&L. The combined
entity will operate under the Velocity Express name and be
headquartered in Westport, CT. The transaction is anticipated to close
in mid August.
In connection with the signing of the acquisition agreement, the
Company sold 4 million shares of its Series Q Convertible Preferred
Stock for a total consideration of $40 million and 75,000 units of its
12% Senior Secured Notes due 2010 for a total consideration of $70.7
million. The 12% Senior Secured Notes consist of a Note with a face
value of $1,000 and 345 Warrants to purchase Velocity Express common
shares at an exercise price of $1.45 per share. Each share of the
Series Q Convertible Preferred Stock may be converted into 9.0909
shares of Velocity Express common stock and carries a 6% dividend
which may be paid in cash or in kind. Simultaneously with this
financing, the Company paid off and terminated its revolving credit
facility and Senior Subordinated Note.
Velocity Express Corporation
Velocity Express has one of the largest time definite nationwide
delivery networks, providing a national footprint for customers
desiring same day service throughout the United States. The Company's
services are supported by a customer-focused technology
infrastructure, providing customers with the reliability and
information they need to manage their transportation and logistics
systems, including a proprietary package tracking system that enables
customers to view the status of any package via a flexible web
reporting system. Visit www.velocityexpress.com for more information.
About CD&L, Inc.
CD&L, Inc. operates from 98 locations in 25 states, including
operations in 28 customer owned facilities, providing last mile
delivery solutions to various industries. The company has over 1,500
employees and utilizes approximately 2,900 independent contractor
drivers to provide time-sensitive delivery services to thousands of
customers across the country.
For purposes of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, readers should be aware that
this press release includes certain "forward-looking statements" that
involve risks and uncertainties that could cause actual results to
differ materially. These statements are typically preceded by words
such as "believes," "expects," "anticipates," "intends," "will,"
"may," "should," or similar expressions. Such statements are based
upon, among other things, assumptions made by, and information
currently available to, management, including management's own
knowledge and assessment of the industry in which Velocity and CD&L
operate. Factors that may cause actual results to differ materially
from those expressed or implied by such forward-looking statements
include, but are not limited to, the risk of successful integration of
the two companies, the ability to achieve enhanced route density, the
ability to retain customers, independent contractors and employees,
the ability to achieve operating efficiencies and eliminate duplicate
costs, the ability to double the size of the company, as well as the
risks and uncertainties detailed from time to time in the Velocity
Express and CD&L's filings with the Securities and Exchange
Commission, including their most recently filed reports on Form 10-Q
and 10-K. Velocity Express and CD&L disclaim any obligations to update
any forward-looking statement as a result of developments occurring
after the date of this press release or to conform them to actual
results.
NOTE: In connection with the proposed merger, CD&L intends to file
a proxy statement and other relevant materials with the Securities and
Exchange Commission (the "SEC"). CD&L's stockholders are urged to read
the proxy statement (and all amendments and supplements to it) and
other materials when they become available because they contain
important information. CD&L's stockholders will be able to obtain free
copies of the proxy statement, when it becomes available, as well as
the other relevant materials, without charge, at the SEC's Web site
(http://www.sec.gov). Copies of CD&L's filings may also be obtained
without charge from CD&L at CD&L's Web site (www.cdl.net) or by
directing a request to CD&L, Inc., Secretary, 80 Wesley Street, South
Hackensack, New Jersey 07606.
CD&L and its directors and executive officers and other members of
management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding CD&L's directors and executive officers is available in
CD&L's 2005 Annual Report on Form 10-K filed with the SEC on April 4,
2006 and CD&L's proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on April 28, 2006. Additional
information regarding the interests of such potential participants
will be included in the proxy statement, and the other relevant
documents filed with the SEC when they become available.