TUCKER, Ga., Oct. 3, 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 has been negotiated to sell its Z-AXIS Inc. subsidiary (Z-AXIS) to a newly-incorporated NY-based company formed by the current management of Z-AXIS. The sale includes Z-AXIS as well as its BEAR Power Supplies and Boundless Technologies business units.
Under the terms of the agreement, Video Display Corporation (VDC) will receive ninety percent of the sale proceeds in cash at closing with the remaining balance in the form of a subordinated note receivable from the buyer of Z-AXIS. The entities being sold primarily design and manufacture specialty power supplies for the global market and offer contract manufacturing services to customers in the NY State, New England and mid-Atlantic market areas. As part of the VDC family of companies, Z-AXIS accounted for approximately 21.0% of the total corporate revenues for the most recent fiscal year ended Feb 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 it is expected to close on or about November 15, 2013. All current employees and management staff are expected to remain in place at the Z-AXIS headquarters and manufacturing facility in Phelps, NY.
"Z-AXIS is excited to be embarking on this new experience as a privately held and managed entity, which ensures the continued employment of our local personnel with the same experienced team that has built an extremely successful company in upstate NY," stated Michael Allen, president of the of the Z-AXIS subsidiary of Video Display Corporation. "We are looking forward to this opportunity to continue our growth pattern well into the future here in Ontario County, NY."
Ron Ordway, CEO of Video Display Corporation, commented, "The sale of our Z-AXIS, BEAR Power and Boundless 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, "Subsequent to closing of the Z-Axis transaction, VDC will have accomplished its prime goal of eliminating all bank revolver and term debt leaving the Company with substantial cash reserves. We are continuing to discuss the sale of additional subsidiaries with parties interested in acquiring segments of the VDC family of display companies and will report on progress of those negotiations as it occurs."
About Video Display Corporation
The VDC family of companies consists of 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 Z-AXIS and Bear Power, the expected timing of the closing of the acquisition and the number of employees who are expected to remain subsequent to 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; Z-AXIS and Bear Power may not be able to maintain or grow 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 Z-AXIS and Bear Power disposition may not be consummated due to the failure to satisfy the various conditions to closing, including access to the capital by the Buyer to complete the transaction, the need for banking approvals 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.