National Investment Managers to Sell for $48 Million in Cash
DUBLIN, OH, November 15, 2010 -- National Investment Managers, a nationally-based and regionally-operated retirement plan administration and investment management company, with over $11 billion of assets under administration, today announced that it has entered into a non-binding letter of intent, with exclusivity provisions, for the sale of the company to an entity to be formed by Stonehenge Partners, Inc. for $48 million in cash, subject to a negotiated net working capital target. Stonehenge Partners, Inc., based in Columbus, Ohio, manages more than $600 million of private capital and focuses on investing in middle-market businesses.
Completion of the sale is subject to certain terms and conditions, including the negotiation and execution of a mutually satisfactory definitive acquisition agreement, completion of financing arrangements and due diligence by Stonehenge, and requisite approvals from the Company's senior and subordinated senior lenders and shareholders. The parties are working toward the execution of a definitive agreement by year-end, assuming all conditions in the letter of intent are satisfied by the required time lines.
After payment of NIVM's outstanding debt, transaction expenses and certain other liabilities currently estimated to aggregate approximately $35 - 36 million and after giving effect to any required working capital adjustment, the remainder of the purchase price would be allocated among the holders of each series of NIVM's preferred stock and the holders of its common stock. The investment banking group of Carl Marks Advisory Group, LLC is acting as financial advisor to the Company.
National Investment Managers also announced its financial results for the third quarter, 2010, as follows:
Revenues for the three months ended September 30 2010, improved to $14.0 million compared to $11.0 million for the same period in 2009, an increase of $3.0 million or 27.2%. The Company's earnings before interest, taxes, depreciation, amortization, change in derivative financial instruments and stock-based compensation (EBITDA SBC) reached $4.7 million for the third quarter 2010, up from $2.0 million for the same period in 2009.
Net income for the quarter ended September 30, 2010, was approximately $1.12 million with accrued preferred dividends of approximately $467,000, resulting in a net income available to common shareholders of approximately $0.65 million, or $0.02 per fully diluted share. For the same period in 2009, the net loss was approximately ($1.09) million, with approximately $494,000 in accrued preferred dividends, resulting in a net loss available to common shareholders of approximately ($1.59) million, or ($0.04) per fully diluted share. The weighted average number of common shares outstanding stood at roughly 41.5 million basic and 72.9 million diluted for the three months ended September 30, 2010 and 39.6 million basic and diluted for the same period ended September 30, 2009.
Revenues for the nine month period ended September 30, 2010 were $35.8 million compared to $37.7 million for the same period in 2009, a decrease of 5.1%. The Company's earnings before interest, taxes, depreciation, amortization, change in derivative financial instruments and stock-based compensation (EBITDA SBC) was $7.8 million for the nine months ended September 30, 2010 compared to $8.7 million for the same period in 2009.
The net loss for the nine month period ended September 30, 2010, was approximately ($202,000) with accrued preferred dividends of approximately $1.45 million, resulting in a net loss available to common shareholders of approximately ($1.65) million, or ($0.04) per fully diluted share. For the same period in 2009, net income was approximately $1.12 million, with approximately $1.48 million in accrued preferred dividends, resulting in a net loss available to common shareholders of approximately ($366,000), or ($0.01) per fully diluted share. The weighted average number of common shares outstanding stood at roughly 40.5 million basic and diluted for the nine months ended September 30, 2010 and 39.6 million basic and diluted for the same period ended September 30, 2009.
Steven J. Ross, Chief Executive Officer of National Investment Managers, said, "Our focus during the third quarter was to work with Carl Marks to continue the execution of a well-defined process toward a refinancing of debt or sale of the Company. While a significant amount of management time has been spent on that initiative, our field personnel met or exceeded all client deliverables which allowed the Company to post very positive results for the quarter. These results clearly demonstrate the strength and stability of our business model, and are a credit to the exceptional capabilities of our organization."
John M. Davis, President and Chief Operating Officer, added, "I am proud of all of our people who have worked so hard to deliver early on nearly every client commitment for our calendar year plans. Our third quarter results were clearly buoyed by the completion of work well in advance of the October 15th filing deadline for Form 5500s. Due to anticipated delays associated with the newly required EFAST2 electronic filing process, we made a company-wide decision to accelerate our filings to avoid potential issues, and our people delivered. Our year-to-date results were slightly down from 2009 due to lower EGTRRA restatement revenue for defined contribution plans, which was expected with the completion of the restatement cycle for those plans in April, 2010."
He concluded, "Great companies are built on a foundation of great people. And, despite the difficult economy, general business conditions, and the distractions associated with the recapitalization initiative, our people and our entire organization have continued to persevere. We've delivered upon every client commitment with superior service, and at the same time, continued to stay on track with our strategic and operational plans toward the development and implementation of our national technology platform and administrative business model across the country. As such, our people have been required to wear many hats, but we've accomplished a great deal as a team, and together we look forward to establishing NIVM as the premier retirement services company on a national level."
About National Investment Managers
National Investment Managers Inc. is a holding company and a consolidator of pension plan administration, investment management and insurance businesses. Its strategy includes a custom-tailored acquisition formula for each acquired business, which allows local and regional entities to retain their autonomy while benefiting from the reach that a national presence offers. In addition, the Company's approach offers entrepreneurs in these businesses an exit strategy suited to their specific needs. National Investment Managers targets businesses with stable cash flows and high operating margins to ensure successful integration of operations once a sale is concluded. Acquired companies continue to operate under their own brands, usually with minimal staff turnover to ensure that relationships of many years' standing are not disrupted. At the same time, these formerly small businesses can cross-sell related financial services under the National Investment Managers umbrella and enjoy administrative and other support from around the country.
The member firms of National Investment Managers provide pension administration services, retirement planning, defined benefit services, asset preservation, general insurance and asset management services. Wholly-owned subsidiaries of National Investment Managers are based in Anchorage, AK; Laguna Hills, CA; Marina Del Rey, CA; Denver, CO; Southington, CT; Lake Mary, FL; Pikesville, MD; North Attleboro, MA; Haddonfield, NJ; New York City, NY; Yorktown Heights, NY; Beaverton, OR; Harrisburg, PA; Horsham, PA; Wayne, PA; Warwick, RI; Houston, TX; and Seattle, WA. NIVM's corporate headquarters are located in Dublin, OH.
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