Riverdale LLC and GenesisIntermedia Inc. Enter Into Agreement
LOS ANGELES--June 29, 2001--GenesisIntermedia Inc. today announced that it has received a conditional commitment from Riverdale LLC, a company owned by Carl C. Icahn, the New York-based financier, to provide for a $100 million credit facility.The purpose of the credit facility is to finance acquisitions as part of GenesisIntermedia's business plan of aggressive growth through acquisition.
The agreement also calls for Riverdale LLC, or its affiliates, to provide investment-banking services related to the acquisition plan, including:
| -- | Advising on GenesisIntermedia's acquisition strategy |
| -- | Sourcing acquisition candidates |
| -- | Structuring acquisitions |
| -- | Proposing alternative financing sources |
| -- | Undertaking due diligence of proposed acquisitions |
Consummation of the financing transactions is subject to the negotiation and execution of definitive credit and security documents. Consummation of any financings under the facility is also subject to a number of conditions, including credit review of potential acquisition targets, lender due diligence of the acquisitions and other conditions to be set forth in the definitive credit agreement.
"We're excited by the opportunities that this credit facility and investment banking relationship afford us. We expect to be able to act quickly as we continue to identify acquisition opportunities that will grow revenues and enhance value," stated Ramy El-Batrawi, chairman and chief executive officer of GenesisIntermedia.
"We expect that this arrangement should facilitate our ability to complete acquisitions of businesses that expand and enhance our operations while benefiting from the acumen and expertise of the Icahn group."
GenesisIntermedia continually reviews acquisition opportunities as part of its growth plan and is actively pursuing several acquisition targets at this time. GenesisIntermedia and Riverdale LLC are now studying these transactions under consideration.
The company believes that completion of targeted acquisitions will bolster the company's cash position and revenues. No assurance can be given that any acquisitions will be consummated. The company believes that the $100 million credit facility will enable GenesisIntermedia to more easily and rapidly complete transactions that are accretive to the company's earnings.
As described in the Form 8-K filed today by the company, in conjunction with the $100 million credit facility and investment banking services, the company issued warrants to acquire 4 million common shares and El-Batrawi has granted options to acquire a total of 1.5 million of his common shares to the Icahn entities.
If all of the warrants and options were to be exercised, Riverdale LLC would hold an approximate 20 percent stake in the company. All of the shares underlying the warrants and options will be subject to a one-year lock-up described in the commitment.
Concurrent with the company's grant of the options, El-Batrawi and Ultimate Holdings Ltd., a principal stockholder in the company, agreed to grant to the company similar options to purchase shares held by them in the event Riverdale LLC exercises the warrants issued by the company.
The exercise prices of these options equal the price to Riverdale LLC, so dilution for existing stockholders will be minimized as a result of the transaction.
&.theautochannel.com/search/search.html?words=Best%20Retail%20Headquarters%20Application">Best Retail Headquarters Application" in the category of Core Retail Marketing.