March 09, 2010 09:29 ET
Veltex Signs Standstill Agreement With Acquisition Candidate
CHICAGO, IL--(Marketwire - March 9, 2010) - Veltex Corporation (PINKSHEETS: VLXC) ("Veltex") announced today that the company has entered into talks to acquire a major wholesale liquidation firm based in the Los Angeles, California area.
Veltex's Board of Directors has signed a Standstill and Confidentially Agreement with a major privately held wholesale and resale corporation. Due to that agreement, the identity of the counterparty could not be released at this time.
R. Preston Roberts, Chairmen of Veltex, stated, "This is a perfect fit for both firms. The discussions have gone very well thus far with their board members in negotiating the exact terms of the transaction. Veltex's board has been active in seeking opportunities to enhance shareholder value. This transaction is on point for our target group."
Roberts stated further, "They have reached a level of critical mass and combining with Veltex will allow the value of their company to be reflected in the market place and allow us to continue expansion at objective levels. Veltex's potential partner is profitable and has a compound annual growth rate of over 40% since 2004, having been ranked by both Inc. Magazine and the LA Business Journal as one of the fastest growing private companies for the last three years. We are highly confident that a transaction will take place."
The potential candidate maintains a 240,000 sq. ft. warehouse near LAX and sells some of the best closeout merchandise obtained from retailer overstock, manufacturer liquidations, insurance companies and bankruptcies and resells worldwide. Revenues in 2009 exceeded $22 million with approximately 50 employees at its main operation.
Although no timeline was announced, both firms stated that a priority has been placed on completing due diligence and for a definitive transaction in a timely manner.
Veltex will update shareholders and the public with developments as progress warrants.
Veltex Corporation maintains its corporate headquarters in Chicago, Illinois.
Safe Harbor Statement
Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors.