Moto Guzzi Corp. to Merge With North Atlantic Acquisition Corp.
18 August 1998
Moto Guzzi Corp. Agrees to Merge With North Atlantic Acquisition Corp.
NEW YORK--Aug. 18, 1998--Trident Rowan Group, Inc. announced today that its 80%-owned subsidiary, Moto Guzzi Corp., the U.S. parent of Moto Guzzi S.p.A., the renowned Italian manufacturer of high-performance motorcycles, executed a definitive merger agreement with North Atlantic Acquisition Corp. (OTC: NACQA).
Under the terms of the merger, while North Atlantic will be the surviving corporation, the current shareholders of Moto Guzzi will own approximately 79% of the combined company, whose common stock will be publicly traded. The largest shareholders of the merged entity, which will be renamed Moto Guzzi Corporation, will be Trident Rowan Group and another of its subsidiaries, O.A.M. S.p.A., which together will own approximately 62.5% of the surviving company's Class A Common Stock. Current owners of Moto Guzzi's preferred stock will own an additional approximately 15.6% of the Class A Common Stock. The consummation of the merger will require, among other things, the approval of the shareholders of both companies.
North Atlantic was formed in 1995 for the express purpose of serving as a vehicle to effect a merger, exchange of capital stock, asset acquisition or other business combination with an operating company. North Atlantic raised approximately $8.9 million net of underwriting fees and expenses in August 1997 through an initial public offering of its common stock.
The company plans to utilize cash obtained through the merger with North Atlantic, as well as financing secured from other sources, to enhance the company's manufacturing operations, to fund research and development costs incurred in connection with the introduction of new motorcycle and scooter lines and to finance expanded global marketing and promotion activities, with particular emphasis on the key U.S. market. In addition, the surviving corporation may, under certain circumstances, realize proceeds of up to approximately $15 million through the exercise of North Atlantic's existing warrants, thereby providing Moto Guzzi with additional equity capital that will be utilized to further revitalize and enhance the company's brand and market position.
Mark Hauser, who will serve as Chairman of Moto Guzzi following completion of the merger, stated that, "This transaction provides the equity capital required to start to execute Moto Guzzi's five year business plan, the objective of which is to return to, and ultimately exceed sales levels of approximately 25,000 units annually, which is below the unit volumes achieved in the late 1960s and early 1970s." Mario Tozzi-Condivi, the President of Moto Guzzi's Italian manufacturing subsidiary, stated that, "The investment we will make following the merger, combined with the company's potential relocation of the bulk of its operations to a state-of-the-art facility in Monza, Italy, will provide Moto Guzzi with a platform to return to its historical position as one of the leading designers, manufacturers and marketers of heavyweight motorcycles in the world."
Moto Guzzi, one of the oldest and most storied motorcycle manufacturers in the world, is headquartered in Mandello del Lario, Italy and is currently a subsidiary of Trident Rowan Group, Inc. The company produces several models of heavyweight high-performance motorcycles, including the "California," "Nevada Club," "V10 Centauro," and "1100 Sport Corsa." After a 1993 low in production of fewer than 3,000 units, the company in 1997 sold 5,593 units and generated 85.9 billion Lira (approximately US$50 million) in net sales.
The Moto Guzzi turnaround was commenced by Trident Rowan Group in 1994, following the completion of the sale of its former Maserati automobile manufacturing operations to the Fiat group and the retirement of its long-time principal shareholder and former chairman, Alejandro DeTomaso. Howard E. Chase, Chairman of the Board of Trident Rowan, noted that the merger with North Atlantic represents another critical step in the evolution of Moto Guzzi.
The information in this press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements.