Simula Inc. Recapitalization Includes Sale of Airline Interiors
4 January 2000
Simula Inc. Recapitalization Includes Sale of Airline Interiors; Company to Focus on Core Businesses
PHOENIX--Jan. 4, 2000--Simula Inc. today announced the results of a program to repay existing indebtedness and increase working capital.The program includes the sale of substantially all the assets of Airline Interiors Inc., a wholly owned subsidiary, for approximately $22 million in cash and assumed liabilities; the procurement of a new $22 million credit facility; and the private placement of $20 million in secured senior notes.
The Company has entered into an agreement to sell substantially all the assets of Airline Interiors to Weber Aircraft Inc., a Texas-based subsidiary of Zodiac S.A., a worldwide leader in commercial aircraft seating.
The purchase price, subject to customary closing adjustments, will consist of approximately $14.5 million in cash and the assumption of approximately $7.5 million of liabilities, approximately $2.5 million of which represents amounts due to other Simula companies, which will be paid within approximately 30 days of closing.
The transaction is subject to federal anti-trust review and is expected to close in late January 2000. CIBC World Markets was engaged in June 1999 to represent the Company as its M&A banker for the sale.
The new $22 million credit facility, underwritten by The CIT Group Inc., replaces the Company's existing bank line of credit and consists of a $17 million three-year revolver at prime, and a $5 million term note at prime plus three; the term note is due on the closing of the sale of Airline Interiors.
The $20 million in secured senior notes, consisting of $5 million at 15% due in September 2000 and $15 million at 12 1-4% due in September 2003, has been placed with Levine Leichtman Capital Partners II, LP, which as part of the transaction has also received 850,000 common stock purchase warrants, exercisable at $5, expiring in seven years.
Both the credit facility and the sale of the secured senior notes were arranged by Jefferies & Company, which Simula has retained as investment banker to assist it in implementing an ongoing program to strengthen the Company's balance sheet and refocus its business.
"The sale of Airline Interiors," said Donald W. Townsend, President and CEO of Simula, "enhances the Company's liquidity and advances our Strategic Repositioning Plan. The plan includes implementing value-added performance metrics to align operational performance with increased shareholder value and positioning the company for positive free cash flow in 2000.
"The Company will continue to evaluate the operational performance of our business units to ensure alignment with the Company's strategic plans. In addition, we are enthusiastic about the financial partnership we have formed with Levine Leichtman Capital Partners. Their depth of experience, substantial capital resources, and commitment to the Company's business plan makes Levine Leichtman Capital Partners a good financial partner."
Levine Leichtman Capital Partners is a private investment firm with in excess of $450 million of institutional capital for investment in middle market companies headquartered in the Western United States. The firm provides debt and equity capital to companies for growth and expansion.
"We are very pleased to make an investment in Simula Inc.," stated Arthur E. Levine. "We believe the Company is a leader in its industry and has a strong and experienced management team."
Simula is a leader in developing and commercializing protective systems and energy absorption technologies that safeguard human lives. Products include advanced occupant seating and restraint systems for military and automotive applications. Additional information may be found at www.simula.com.
Statements made in this news release, including forward-looking statements concerning the anticipated completion of the sale of the assets of Airline Interiors Inc. are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in such statements. Among other things, it is possible that the federal government will not approve the sale of the assets of Airline Interiors Inc. to Weber Aircraft Inc. Other factors that may cause actual results to differ from anticipated results include those described in the Company's registration statements and periodic reports filed with the U.S. Securities and Exchange Commission.