TORONTO, March 7, 2013 /CNW/ - Davis + Henderson Corporation (TSX: DH)
("D+H") today announced that it has entered into an agreement to divest
several non-strategic business processing businesses to California
based The Gores Group. Financial terms of the transaction were not
disclosed, and are not considered material.
The businesses, operating in five locations across Canada, include
Credit Card Services, Contact Centre Services, Benefits &
Administration, and Coupon & Rebate Services, acquired as part of its
acquisition of Resolve in 2009, and Real Estate Services, acquired as
part of its acquisition of Filogix in 2006. These businesses largely
serve customers comprising retailers, real estate boards, and packaged
goods companies, and provide services that are not considered part of
D+H's core business of serving financial institutions.
This divestiture is consistent with D+H's focus on financial technology
solutions for banks and credit unions. While the businesses generate
around $60 Million of revenue, D+H does not expect the divestiture to
have a material impact on operating profits. D+H and The Gores Group
have entered into a transition services agreement in order to ensure a
smooth transition for customers; management, staff and facilities
related to these businesses are transitioning as part of the agreement.
These businesses, and the related transition activities, will be
accounted for as discontinued operations beginning during the first
quarter of 2013.
"Since owning these businesses we have developed them into solid
businesses that have strengthened the value to customers. We want to
thank the approximately 1,400 employees working in these businesses for
their dedication and what they were able to accomplish for customers,"
said Gerrard Schmid, CEO of D+H.
"Over the past few years D+H has been pursuing a strategy of
increasingly focusing on providing technology and technology enabled
solutions to the financial services sector throughout North America,
and these divestitures are consistent with that strategy."
The transaction is expected to close in mid-April, 2013, subject to
satisfaction of customary closing conditions. The proceeds of the sale
will be used for further debt repayments. Origin Merchant Partners
acted as the financial advisor to D+H for this transaction.
D+H is a leading provider of secure and reliable technology solutions to
North American financial institutions. With a long history as a trusted
partner to banks, credit unions and other financial services providers,
D+H's solutions allow our customers to focus on serving their
customers. And, as the financial services marketplace continues to
evolve, so do we. D+H offers a wide spectrum of technologies and
services that are designed to help financial institutions stay
competitive by supporting specific areas of their business as well as
overall operations. D+H's diverse and growing portfolio includes
everything from lending technologies, to loan administration services,
to payment solutions including cheque and value-added membership
marketing programs. In 2012, D+H rose to 35th on the FinTech 100, a
ranking of the top technology providers to the global financial
Davis + Henderson Corporation is listed on the Toronto Stock Exchange
under the symbol DH. Further information can be found in the disclosure
documents filed by Davis + Henderson Corporation with the securities
regulatory authorities, available at www.sedar.com.
About the Gores Group
The Gores Group, LLC is a global investment firm focused on acquiring
controlling interests in mature and growing businesses which can
benefit from the firm's operating experience and flexible capital base.
The firm combines the operational expertise and detailed due diligence
capabilities of a strategic buyer with the seasoned M&A team of a
traditional financial buyer. The Gores Group, which was founded in 1987
by Alec E. Gores, has become a leading investor having demonstrated
over time a reliable track record of creating value in its portfolio
companies alongside management. Headquartered in Los Angeles, The
Gores Group maintains offices in Boulder, CO, and London. For more
information, please visit www.gores.com.
Forward Looking Statements
This press release contains certain statements that constitute
forward-looking information within the meaning of applicable securities
laws ("forward-looking statements"). Statements concerning D+H's
objectives, goals, strategies, intentions, plans, beliefs, expectations
and estimates, and the business, operations, financial performance and
condition of D+H are forward-looking statements. The words "believe",
"expect", "anticipate", "estimate", "intend", "may", "will", "would"
and similar expressions and the negative of such expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements are subject to important assumptions,
including the following specific assumptions: the ability of D+H to
meet its revenue, EBITDA, Adjusted EBITDA and Adjusted net income
targets; general industry and economic conditions; changes in D+H's
relationship with its customers and suppliers; pricing pressures and
other competitive factors; the anticipated effect of acquisitions or
dispositions on the financial performance of D+H; and the expected
benefits arising as a result of the acquisitions or dispositions. D+H
has also made certain macroeconomic and general industry assumptions in
the preparation of such forward-looking statements. While D+H considers
these factors and assumptions to be reasonable based on information
currently available, there can be no assurance that actual results will
be consistent with these forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Business, or developments in D+H's
industry, to differ materially from the anticipated results,
performance, achievements or developments expressed or implied by such
Risks related to forward-looking statements include, among other things,
failure of the parties to satisfy the applicable closing conditions,
challenges presented by declines in the use of personal and business
cheques; D+H's dependence on a limited number of large financial
institution customers and dependence on their acceptance of new
programs; strategic initiatives being undertaken to meet the D+H's
financial objective; stability and growth in the real estate, mortgage
and lending markets; increased pricing pressures and increased
competition which could lead to loss of contracts or reduced margins;
as well as general market conditions, including economic and interest
rate dynamics. Given these uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. The documents
incorporated by reference herein also identify additional factors that
could affect the operating results and performance of D+H.
Forward-looking statements are based on management's current plans,
estimates, projections, beliefs and opinions, and D+H does not
undertake any obligation to update forward-looking statements should
assumptions related to these plans, estimates, projections, beliefs and
opinions change except as required by applicable securities laws.
All of the forward-looking statements made in this press release are
qualified by these cautionary statements and other cautionary
statements or factors contained herein, and there can be no assurance
that the actual results or developments will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effects on, D+H.
SOURCE: Davis + Henderson Corporation
For further information:
Brian Kyle, D+H
Melissa Dinsmore, D+H
416-696-7702 x 5164
Hill+Knowlton Strategies for D+H
GORES GROUP CONTACT:
EVP, Marketing & Business Development