TUCKER, Ga., July 26, 2013 (GLOBE NEWSWIRE) -- Video Display Corporation (Nasdaq:VIDE), a global leader in design and manufacture of specialty displays and display solutions, today announced a definitive agreement was signed to sell primarily all of the assets and liabilities of the Company's Lexel Imaging Systems, Inc. subsidiary (Lexel) to Citidal Partners LTD, LLC.
Under the terms of the agreement, Video Display Corporation (VDC) will receive cash and Citidal debt securities for the sale of Lexel Imaging Systems, a manufacturer of specialty Cathode Ray tubes for military, medical, industrial and simulation market requirements. Lexel, which is part of the VDC family of display companies, accounted for approximately 13 percent of the total corporate revenues for the most recent fiscal year ended February 28, 2013.
The transaction, which has been approved by the boards of directors of both companies, is subject to customary closing conditions, including review and approval of VDC's commercial banker, PNC Bank, and it is expected to close on or before September 23, 2013. All of Lexel's current employees and management staff are expected to remain in place in Lexington, KY and will join Citidal at the close of the transaction.
"Lexel Imaging is excited to be joining with the experienced Citidal team as their many industrial contacts and connections are expected to greatly enhance and expand the scope of products and markets currently being served by our company," said Bill Frohoff, president of the Lexel Imaging subsidiary. "This acquisition enables Lexel to address market opportunities in numerous arenas outside of the legacy CRT display business and complements our strong electronics manufacturing capabilities."
Ron Ordway, CEO of Video Display Corporation, commented, "The sale of our Lexel Imaging subsidiary is part of an overall program, announced in September of 2012, to enhance VDC shareholder value through the sale of VDC, either in whole or through the sale of its integral divisions and subsidiaries as opportunities presented themselves in the best interest of the shareholders." He further stated, "We are continuing to discuss the sale of additional subsidiaries with parties interested in acquiring components of the VDC family of display companies and will report on progress of those negotiations as it occurs."
About Video Display Corporation
VDC companies are leading designers, manufacturers, and suppliers of displays and display systems for the most demanding OEMs, prime contractors and specialty contractors around the world. The VDC companies have led the way over the past 38 years providing standard and custom products to today's leading global OEMs crossing all major display requirements in defense, aerospace, industrial automation, medical, and transportation as well as training and simulation markets.
This news release contains certain forward-looking statements, including the expected benefits of our pending disposition of Lexel Imaging Systems, the expected timing of the closing of the acquisition, and the number of employees who are expected to join Citidal at the closing of the transaction, which are based on our current expectations and are subject to numerous risks and uncertainties that may cause these forward-looking statements to be Risks that may cause these forward-looking statements to be inaccurate include among others: we may experience delays in the timing; Citidal may not be able to maintain and grow or maintain the customer relationships required to achieve its anticipated revenue and margins, and therefore fail to perform on its debt obligations to VDC; the Company may incur one-time charges, adverse tax consequences, amortization of intangible assets or impairment of goodwill, which could harm our results of VDC's operations; the Lexel Imaging Systems disposition may not be consummated due to the failure to satisfy the various conditions to closing, including the need for banking approval; and the other risks detailed from time to time under the caption "Risk Factors" and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our Annual and Quarterly Reports on Forms 10-K and 10-Q.