Precision Aerospace Components (the “Company") (PAOS:OTCPK) and its Board of Directors completed a strategic recapitalization of the Company, on Friday, January 16. Polymathes Capital ("PolyCap") acted as the investment sponsor, C3 Capital provided financing, and Variant Capital represented the company in the process.
The recapitalization of the Company provided the company a combination of equity and debt, which was used to repay its senior loan and inject working capital. Andrew Prince, retiring CEO and Vice Chairman of the board of directors, said, "The Board of Directors unanimously concluded that this transaction was in the best interests of Precision and its shareholders. We believe this is a positive outcome for our shareholders following a lengthy turnaround process which began in approximately May 2012. Precision is poised for a new era of growth." Richard McVaugh will become President of Precision effective immediately. “I look forward to strengthening relationships with customers and vendors to execute on the new strategic plans,” said McVaugh.
Mr. Prince will continue to advise the Company as a member of the board of directors for at least a year. The Company will appoint John F. Wachter to the role of interim Chairman. "This is an exciting time for Precision, and I am honored to serve during the transition period," said Mr. Wachter.
As part of the transaction John F. Wachter and William J. Golden, managing members of PolyCap, have been appointed on the board of directors. Regarding the transaction, Mr. Wachter said, "Bill and I have enjoyed working in this process, and we look forward to the opportunity to work alongside Rich and all of the Precision team."
About Precision Aerospace Components
Precision Aerospace
Components, Inc. and Subsidiaries (the “Company”) distributes
high-quality, predominantly domestically-manufactured, technically
complex, nut and bolt products and a proprietary locking washer product
that are used primarily for aerospace and military applications and for
industrial/commercial applications that require a high level of
certified and assured quality. The Company's operations are carried out
through its wholly-owned distribution subsidiaries, Aero-Missile
Components, Inc. (“Aero-Missile”), Freundlich Supply Company, Inc.
(“Freundlich”), and Creative Assembly Systems, Inc. (Creative Assembly)
and Tiger-Tight Corp. (“Tiger-Tight”). Aero-Missile and Freundlich both
have stocking distributor relationships with a number of United States
fastener manufacturers and sell high technology, specially engineered
fasteners - nuts and bolts - predominantly to all levels of the aviation
industries (original equipment manufacturers, maintenance and repair
organizations, and other distributors as well as to the United States
Department of Defense (“Department of Defense”). Creative Assembly
Systems, Inc. (“Creative Assembly”) is a value added distributor of
proprietary and specialty fasteners, primarily serving the heavy truck,
automotive, appliance, and material handling industries. Tiger-Tight is
the exclusive North American master distributor of the Tiger-Tight
locking washer. Tiger-Tight washers are used in demanding vibration
applications and the Company believes they have significant advantages
in comparison to competitive products.
About Polymathes Capital
Polymathes Capital ("PolyCap") is
manager of investment partnerships of both public and private equities,
located in Princeton, NJ. PolyCap is co-managed by Messrs. John Wachter
and William Golden, Esq.
About C3 Capital
C3 Capital is an SBIC fund manager based in
Kansas City with an additional office in Phoenix. The firm specializes
in providing growth capital to small and medium sized businesses across
the United States, usually in the form of subordinated debt. The firm
has invested in over 65 businesses since 2003 and is currently investing
through its third fund. The firm's investment criteria and list of
portfolio investments can be found at the website (www.c3cap.com).
Please contact Nicole Doyle at 816-756-2225 for further information.
About Variant Capital
Variant Capital Advisors, LLC
(“Variant Capital”) specializes in providing investment banking services
to middle market companies. As a trusted financial advisor, Variant
Capital provides creative solutions for its clients, encompassing a
broad range of services, including mergers & acquisitions advisory,
capital raising, financial restructurings, recapitalizations,
valuations, and general corporate and equity sponsor advisory services.
These transactions have covered a variety of industries from
manufacturing to services, and include investors and financial
institutions in both the public and private markets. Securities
transactions are conducted by our wholly owned subsidiary, Eight Pines
Securities, LLC member FINRA/SIPC.
Forward-Looking Statements
Statements contained herein which
are not historical facts or information are "forward-looking
statements." Words such as "believe," "expect," "intend," "will,"
"should," and other expressions that indicate future events and trends
identify such forward-looking statements. These forward-looking
statements involve risks and uncertainties which could cause the outcome
to be materially different than stated. Such risks and uncertainties
include both general economic risks and uncertainties and matters
discussed in the Company's annual report on Form 10-K filed March 29,
2013, and 10-Q filed November 14, 2013, which relate directly to the
Company's operations and properties. The Company cautions that any
forward-looking statement reflects only the belief of the Company or its
management at the time the statement was made. Although the Company
believes such forward-looking statements are based upon reasonable
assumptions, such assumptions may ultimately prove to be inaccurate or
incomplete. The Company undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the
date on which the statement was made. More detail regarding the
recapitalization transaction can be found in the company’s filings
available on the SEC’s EDGAR website.
Contact Information
Rich McVaugh, President Precision
Aerospace Components, (215) 245-5700 RMcVaugh@precaeroinc.com
John
Wachter, Interim Chairman Precision Aerospace Components, (215) 245-5700