Hammonds Industries Sells Subsidiaries to Private Company
April 20, 2009
HOUSTON-Hammonds Industries Inc. (HMDI) has announced that the board of directors has accepted an offer from FabCorp Inc., a Houston-based manufacturing company, and sold the Hammonds subsidiary companies pursuant to an asset purchase agreement. The board of directors and consenting shareholders owning in excess of 60% of HMDI common stock consented to the asset purchase transaction.
The board of directors reached its decision to sell its operating subsidiaries after reviewing HMDI’s business operations and financial condition, including the existing credit conditions confronting the national economy. HMDI’s management had been seeking equity or debt financing for the past year in order to support continuing liquidity requirements. Though substantial efforts have been made to arrange such financing, including the engagement of investment banking consultants, those efforts were unsuccessful and, as a result, the board of directors determined that HMDI had no other available options.
A newly formed Texas company, named Hammonds Technologies LLC, a wholly owned subsidiary of FabCorp Inc., has acquired the operating subsidiaries of HMDI, leaving the public company to seek other opportunities including potential business combinations and mergers with operating companies and will operate under a new name.
The transaction closed and funding occurred on April 16th, relieving HMDI and guarantors of its bank debt obligations of approximately $2.7 million and the obligations of the subsidiary companies, which were assumed by Hammonds Technologies LLC.