Charterhouse Makes Strategic Investment of $75 Million
20 November 1998
Charterhouse Makes Strategic Investment of $75 Million in United Road Services
ALBANY, N.Y., Nov. 20 -- United Road Services, Inc.
today announced that Charterhouse Group International, Inc.
will purchase $75 million of newly issued Convertible Subordinated Debentures
due 2008. The Debenture has an 8 percent pay in kind coupon and is convertible
into common stock at $15 per common share. This investment will be executed
in two tranches. The initial tranche of $43 million will close in
approximately two weeks. The remaining tranche will be subject to shareholder
approval and is expected to close early in 1999. Concurrent with the initial
investment, Merril M. Halpern, Chairman and Chief Executive Officer of
Charterhouse and Robert L. Berner, III, Managing Director of Charterhouse,
will be added to the United Road Services' Board. Upon completion of the
second tranche Michael S. Pfeffer, Senior Vice President of Charterhouse, will
also join the Board. Charterhouse's investment represents approximately 25
percent of the common stock on a fully as converted basis.
Edward T. Sheehan, Chairman and Chief Executive Officer of United Road
Services said, "Charterhouse's investment represents a historic milestone for
United Road Services. Charterhouse has achieved significant success investing
in growth Companies over the last twenty five years. They have clearly
demonstrated with this investment their confidence in our strategy of
aggressively growing our share of the towing and automobile transport
industries while simultaneously achieving strong internal growth of acquired
Companies and optimizing their future earning performance. The additional
capital Charterhouse is providing should enable us to accelerate next year's
acquisition program. In addition, Charterhouse's expertise, experience and
resources will be extremely valuable to the Company going forward."
Merril M. Halpern, Chairman and Chief Executive Officer of Charterhouse,
said, "We are extremely pleased to partner with Ed Sheehan and his management
team to support United Road Services' acquisition strategy and internal growth
plans. This investment is consistent with Charterhouse's strategy of backing
strong management teams of growth businesses in consolidating industries. Ed
Sheehan's proven track record, first at General Electric and then at United
Waste Systems, is very impressive and consistent with our strategy of backing
proven managers. Since becoming a public company in May of 1998, United Road
has successfully acquired 27 companies and has consistently exceeded Wall
Street expectations. We look forward to working with Ed and his team to
continue the successful deployment of capital and the build-up of a business
with very strong internal growth drivers."
Charterhouse Group International, Inc. is a leader in private equity
investing that was founded in 1973. Charterhouse currently manages
$1.6 billion in private equity investments through several limited
partnerships. It most recently raised $1 billion of capital in March of this
year under its latest fund, Charterhouse Equity Partners III, L.P. Over
Charterhouse's twenty five year history, it has completed more than 80
transactions in a variety of service and industrial businesses, including
waste management, internet services, hospital management, private correction
facilities, electronic components, giftware, specialty paper, toys and other
consumer products.
Formed in July 1997, United Road Services, Inc. is a leading provider of
vehicle and equipment towing and transport services in the United States, with
48 service locations in 16 states. The Company's broad range of services
includes towing, impounding and storing motor vehicles, conducting lien sales
and auctions of abandoned vehicles, and transporting new and used vehicles and
heavy construction equipment. The Company's customer base includes national
automobile leasing and insurance companies, automobile dealers, governmental
agencies, automobile auction companies, and individual motorists.
This release contains forward-looking statements. These statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those anticipated in the forward-looking statements.
Readers should not place undue reliance on forward-looking statements, which
reflect management's view only as of the date hereof. The Company undertakes
no obligation to publicly revise these forward-looking statements to reflect
subsequent events or circumstances. Readers should also carefully review the
risk factors described in documents the Company files from time to time with
the Securities and Exchange Commission.