JACKSONVILLE, Fla., May 23 /PRNewswire-FirstCall/ -- Interline Brands, Inc. ("Interline" or the "Company"), a national distributor and direct marketer of maintenance, repair and operations (MRO) products, announced today that it has entered into an agreement to acquire substantially all of the assets of American Sanitary Incorporated ("AmSan"), a leading national distributor of janitorial and sanitary supplies for a cash purchase price of $127.5 million, subject to working capital and other closing adjustments. The acquisition is expected to close in July 2006, subject to customary closing conditions. Interline has received debt financing commitments from Lehman Brothers and JP Morgan. Interline also expects to refinance its existing indebtedness, including the 11 1/2 % senior subordinated notes due 2011 of its operating subsidiary, Interline Brands, Inc., a New Jersey corporation.
AmSan is one of the largest national distributors in the $23 billion U.S. janitorial and sanitary maintenance supply ("JanSan") industry. The company holds leading market share in many of its end markets and geographic regions. AmSan offers over 40,000 products to more than 50,000 customers from 46 locations in 40 states. Its primary end markets include institutional facilities, such as schools and universities, health care, lodging and government properties as well as professional cleaning contractors. For the twelve month period ended March 31, 2006, the Company estimates that the operations being acquired generated sales and EBITDA of $245.2 million and $16.9 million, respectively.
"The acquisition of AmSan fits well with our strategy of acquiring businesses with leadership positions in attractive facilities maintenance markets. We have followed the company for several years and were attracted to AmSan because of its strong brand recognition, national distribution coverage, comprehensive private label program and experienced management team," said Michael Grebe, President and Chief Executive Officer of Interline. "We were able to acquire a market leader in an attractive growth market, and believe the acquisition offers numerous opportunities to grow sales and improve profitability."
"Interline's national and regional accounts program will benefit from the addition of AmSan's product line and customer relationships," added Grebe. "Our goal is to utilize Interline's integrated logistics infrastructure to improve operations, expand the AmSan brand, and provide a better value proposition for our combined customer base."
The transaction is expected to be modestly accretive to Interline's fiscal 2006 results and further accretive to future earnings as potential synergies are realized. "We anticipate synergies to range between $4 million and $6 million by the end of fiscal 2008, with further upside potential," commented Bill Sanford, Interline's Chief Operating Officer. "Although our model does not assume additional sales synergies, we believe that the opportunity to grow sales and earnings at the combined company is significant."
Assuming the transaction closes, the Company expects the acquisition to add approximately 2 cents per share to earnings for the second half of fiscal year 2006. The Company's guidance for the second quarter 2006 remains unchanged. This guidance does not give effect to any savings or one-time charges that may result from the contemplated refinancing.
Conference Call
Interline Brands will host a conference call on Wednesday, May 24, 2006 at 10:00 a.m. Eastern Time to discuss the transaction. Interested parties may listen to the call toll free by dialing 1-800-427-0638 or 1-706-634-1170. A digital recording will be available for replay two hours after the completion of the conference call by calling 1-800-642-1687 or 1-706-645-9291 and referencing Conference I.D. Number 9700359. This recording will expire on June 7, 2006.
About Interline
Interline Brands, Inc. is a leading national distributor and direct marketer with headquarters in Jacksonville, Florida. Interline provides maintenance, repair and operations (MRO) products to approximately 160,000 professional contractors, facilities maintenance professionals, and specialty distributors across North America and Central America.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, forward-looking statements. The Company has tried, whenever possible, to identify these forward-looking statements using words such as "projects," "anticipates," "believes," "estimates," "expects," "plans," "intends," and similar expressions. Similarly, statements herein that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. The risks and uncertainties involving forward-looking statements include the failure to close the AmSan acquisition and realize expected benefits from the transaction and obtaining debt financing on favorable terms, material facilities systems disruptions and shutdowns, the failure to locate, acquire and integrate acquisition candidates, the dependence on key employees and other risks described in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2005 and its Quarterly Report on Form 10-Q for the three months ended March 31, 2006. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time.
CONTACT: Bill Sanford
PHONE: 904-265-5333
© 2006 PR Newswire
