Mecalux, via its subsidiaries Mecalux USA Inc and Mecalux México S.A. de C.V., has signed a contract with UFC Interlake Holding Co., United Fixtures Company, Inc., Interlake Material Handling, Inc. and Conco-Tellus Inc. for the possible acquisition of their assets. The assets expected to be acquired include the Pontiac (Illinois) and Sumter (South Carolina) plants, the sales network, industrial property rights and the Group’s Mexican subsidiaries, owners of the Mexicali and Matamoros plants. The acquisition would cost $30 million and be fully financed by shareholders equity.
Investment Opportunities for the Group
In January 2007 Mecalux acquired a call option on the American group UFC Interlake Holding Co. for 5.8 million euros, permitting it to acquire the company for a multiple of between seven and eight times the Group's consolidated EBITDA before the end of 2008.
The decision by Mecalux's Board not to exercise its purchase option on UFC Interlake Holding Co. was announced on 4th November.
However, the operation’s new financial conditions and the different legal advantages anticipated under Section 363 of the Bankruptcy Code constitute a good investment opportunity for Mecalux that would enable it to expand its presence in the US and Mexico.
The signing of the contract has followed the procedure anticipated under the abovementioned Section 363 of the US Bankruptcy Code whereby vendor companies should file for Chapter 11 bankruptcy. The procedure holds that a sale is subject, among other conditions, to no third party presenting a purchase option in the pubic auction called to that end which, in the opinion of the American court in question, is more attractive for the creditors and shareholders of vendor firms.
Mecalux, S.A. will publish the result of the auction in the pertinent bulletin. The formalization of the sale, once all the conditions of the operation are met where applicable, would take place during the first quarter of 2009.
The economic and financial information referred to in this press release was drawn up in accordance with International Financial Reporting Standards.
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