Fortran Corporation To Acquire Subsidiary AND 80% of Tower Performance, Inc.
HICKORY, NC, Nov. 16, 2015 /PRNewswire/ -- Fortran Corporation's (OTC: FRTN) agreed to purchase New TPI, LLC, a North Carolina Limited Liability Company owning 80% of the corporate stock of Tower Performance, Inc. (TPI). TPI is a New Jersey Corporation with average gross annual revenues of $13,600,000 and average annual gross profits of $3,500,000 per year over the last five (5) years. Upon completion of the sale and transfer of 100% of NEW TPI, LLC's ownership to Fortran, the transaction is expected to increase shareholder equity value and likely will be accretive to Fortran's earnings. Fortran's Chief Executive Officer, Douglas W. Rink (Rink) believes that the transaction is consistent with the Fortran's goal to acquire businesses intended to grow and diversify Fortran. Fortran will consolidate TPI's annual revenues, which based on historic performance, should grow Fortran from $2,100,000 in FYE 2012, to over $16,000,000 annually. The consolidated financials will be included in the 2nd quarter ending December 31st 2015, expected to be filed on or before February 15th 2016.
The possibility of this transaction was disclosed in Fortran's annual report filed on September 9, 2015, with the OTC Markets. Pursuant to Stock Purchase Agreement, Rink became TPI's Chairman of the Board and Vice President. Further, Fortran's Chief Financial Officer Richard C. Wilson ("Wilson") became a Director and Treasurer of TPI. Effective immediately, Rink through ownership control of New TPI, LLC controls the vote of 80% of TPI's voting stock. Stock Purchase terms include terms pursuant to which NEW TPI, LLC may acquire the remaining 20% stock of TPI within three (3) years. TPI's senior management has agreed to remain with TPI for up to three years.
Substantial personal commitment by Rink, including personal guaranty to TPI shareholders for certain financial terms of a Stock Purchase Agreement with TPI and its three shareholders, was required. Further, Rink also used personal assets and agreement to use Fortran assets as security for a $1,400,000 prime rate, 48 month term loan with BB&T Bank. As a result, and pursuant to Stock Purchase Agreement containing other terms and conditions, eighty percent (80%) of TPI's Stock was transferred to New TPI, LLC on or about November 12, 2015. New TPI, LLC's membership interests were transferred to Fortran subject to reasonable and ordinary securitization and indemnification required to cause the terms of personal guarantees and meet other loan terms. New TPI, LLC is now a wholly-owned subsidiary of Fortran.
"I am excited that Tower Performance will be a part of Fortran," said Rink. "This transaction demonstrates my commitment to grow and diversify Fortran for the benefit of all shareholders. BB&T serving as the primary lender demonstrates that this transaction is based on solid historic financial performance and supports Fortran continuing to strengthen Fortran's business. I look forward to working with Tower's management and believe Tower's management team will add seasoned experience to Fortran's existing management."
About Tower Performance Inc.
TPI has offices in New Jersey, Texas, Arkansas, Pennsylvania and Kansas. Tower Performance can quickly respond cooling tower needs anywhere in the country.
TPI's clients include major chemical companies, oil and gas refineries, utilities, air separation companies and industrial plants. To learn more, please visit the Tower Performance, Inc. web site at www.towerperformance.com
About Fortran Corporation
Fortran Corporation is a communications system integrator through its subsidiaries, NTC, B & L Telephone, LLC, CCI-Telecom, Inc., Fortran Communications, Inc. and Wynncom, Inc. Fortran is dedicated to designing, sourcing, implementing and maintaining communications solutions for business and governments. To learn more, please visit the Fortran website at www.fortrancorp.com.
FORWARD LOOKING STATEMENT
This press release includes forward-looking statements that are based on information currently available to management, management's beliefs, as well as on a number of assumptions concerning future events. Forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, which could cause the actual results to differ materially from those currently expected. In providing forward-looking statements, the company does not intend, and is not undertaking any obligation or duty, to update these statements as a result of new information, future events or otherwise.
SOURCE Fortran Corporation
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