IDS Agrees to Merge With Petrocon Engineering, Inc.

Apr 03, 2001, 01:00 ET from Industrial Data Systems Corporation

    HOUSTON, April 3 /PRNewswire/ -- Industrial Data Systems Corporation
 (Amex:   IDS) and Petrocon Engineering, Inc. ("Petrocon") today announced that
 they have signed a Letter of Intent relating to their proposed merger.
 Petrocon is a privately-held, full service, international engineering and
 control systems firm with approximately 800 employees and 2000 revenues of
 $68 million.  IDS is a service provider and specialty manufacturer, which
 through its largest subsidiary, provides engineering and control system
 services for pipeline and production facilities.  Based in Houston, Texas, IDS
 has approximately 175 employees and 2000 revenues of $17 million.
     The transaction will be effected as a stock for stock merger and is
 subject to the approval of the Board of Directors and stockholders of both
 companies and to customary closing conditions.  IDS will issue 9.8 million
 shares of its Common Stock in return for 100% of Petrocon stock.  The stock to
 be issued to Petrocon shareholders will represent approximately 43.0% of the
 22.8 million shares that will be outstanding after closing.  The combined
 companies are projected to have 2001 pro forma revenues of approximately
 $96 million, total assets of $37 million and stockholders' equity of
 $14 million.  It is planned that Mike Burrow, CEO of Petrocon, will serve in
 the same capacity for IDS and that William A. Coskey, founder, current CEO and
 President of IDS, will serve as President of the combined companies.
     There are many strategic reasons for the proposed combination.  IDS
 believes that the merger with Petrocon will provide it with: 1) a more
 extensive record of performing projects in the downstream segment of the oil
 and gas industry which includes refining, petrochemical and process related
 facilities; 2) an enhanced capability in the area of control systems and
 advanced control technology; and 3) a well recognized field inspection
 services, plant maintenance and construction management operation.  There is
 very little overlap in the two companies' client base or services provided.
 In addition, the combination provides for increased geographical coverage in
 the primary U.S. energy marketplaces of South Louisiana, Texas and Oklahoma,
 with continued access to all U.S. and international projects.
     The letter of intent also provides that, in exchange for forgiveness of
 certain indebtedness, IDS' majority shareholder, Alliance 2000, Ltd.,
 ("Alliance") will grant IDS the option to redeem 4,000,000 shares of IDS
 Common Stock.  The option is not expected to be exercisable until mid-2003.
 William A. Coskey and Hulda L. Coskey are directors and officers of IDS and
 also serve as general partners of Alliance.
     A significant Petrocon creditor is also a party to the Letter of Intent
 and has agreed to convert approximately $9 million of Petrocon debt into
 2.5 million shares of newly issued IDS Series A Convertible Preferred Stock
 (convertible into approximately 1,050,000 shares of Common Stock), in addition
 to receiving cash, and a promissory note.
     In a statement issued regarding the merger with Petrocon, William A.
 Coskey, Chairman and CEO of IDS, commented, "IDS is very excited about the
 opportunity presented by the proposed combination of the our two companies.
 Together, we believe the company will have the size and breadth to fully
 service our combined client base.  We expect to be a major force in the energy
 engineering marketplace with the potential for additional growth and increased
 earnings."
     Also commenting on the merger, Mike Burrow, Chairman, President and CEO of
 Petrocon stated, "From our many meetings with IDS, it is evident that we share
 the same 'core values' and similar visions for our companies.  We see the
 strategic advantages for shareholders, customers, and employees of combining
 our operations."
 
     About Petrocon Engineering, Inc.
     In business since 1973, Petrocon provides a broad range of services to the
 refining, chemical, petrochemical, exploration, production, co-generation,
 manufacturing, process control and advanced automation sectors.  Petrocon
 subsidiaries include: Petrocon Construction Resources, Inc., which focuses on
 field inspection services, process plant operations and construction
 management; Petrocon Systems, Inc., which is a full service control systems
 integration and advanced automation technology company; Triangle Engineers and
 Constructors, Inc., which provides engineering, design and construction
 services to refining, chemical and petrochemical industries; and RPM
 Engineering, Inc./Barnard and Burk Industries, a full service multi-discipline
 engineering company located in Baton Rouge, Louisiana with more than a 50 year
 history of providing quality engineering services.  Petrocon has offices in
 Houston and Beaumont, Texas and Baton Rouge and Lake Charles, Louisiana.
 Petrocon's CEO, Mike Burrow, has completed 18 acquisitions of engineering
 services companies during his career.  Further information about the company
 is available at http://www.petrocon.com.
 
     About Industrial Data Systems Corporation
     Industrial Data Systems Corporation is a service provider and specialty
 manufacturer.  IDS provides consulting services to the pipeline and process
 industries for development, management and turnkey execution of engineering
 projects.  Manufactured products include conditioned power systems and HVAC
 equipment.  Further information about the company is available at
 http://www.idscorporation.com.
 
     Safe Harbor for Forward-Looking Statements
     Except for the historical information contained herein, this news release
 contains forward-looking statements, including, without limitation, statements
 containing the words, "believes," "anticipates," "expects" and words of
 similar import, other statements about Industrial Data Systems Corporation and
 Petrocon Engineering, Inc.'s managements' future expectations, beliefs, goals,
 plans and prospects, and statements regarding the likelihood and timing of the
 closing of the merger, the expected benefits and synergies of the merger, the
 ability of the combined company to successfully provide products and services
 after the merger, and the future growth of the markets served by the
 companies.  Such forward-looking statements have known and unknown risks,
 uncertainties and other factors that may cause the actual results, performance
 or achievements of Industrial Data Systems Corporation, Petrocon Engineering,
 Inc., the combined company or industry results to be materially different from
 any future results, performance or achievements expressed or implied by such
 forward-looking statements.  Such factors include, among others:  risks
 associated with difficulties in successfully integrating Industrial Data
 Systems Corporation and Petrocon Engineering, Inc.'s businesses and
 technologies; costs related to the merger; failure to obtain required
 director, stockholder or regulatory approvals of the merger; failure of the
 combined company to retain and hire key executives, technical personnel and
 other employees; difficulty of successfully managing a large organization;
 potential inability to maintain business relationships with clients and
 suppliers, rapid technological changes; competition in the consulting
 engineering industry; consolidation and cost pressures in the industry, and
 other risk factors.  Reference is hereby made to cautionary statements set
 forth in the Company's Form 10-KSB for the year ended December 31, 2000, Form
 10-QSB for the quarters ended March 31, June 30, and September 30, 2000,
 current Forms 8-K, and other SEC filings.  The forward-looking statements
 contained in this news release are made as of the date hereof and Industrial
 Data Systems Corporation and Petrocon Engineering, Inc. do not assume any
 obligation to update the reasons why actual results could differ materially
 from those projected in the forward-looking statements.
 
     Important Information Will Be Filed With the SEC
     Industrial Data Systems Corporation plans to file with the SEC a
 Registration Statement on Form S-4 in connection with the transaction, and
 expects to file with the SEC and mail their stockholders a Proxy
 Statement/Prospectus in connection with the transaction.  The Registration
 Statement and Proxy Statement/Prospectus will contain important information
 about Industrial Data Systems Corporation and Petrocon Engineering, Inc, the
 transaction and related matters.  Investors and security holders are urged to
 read the Registration Statement and Proxy Statement/Prospectus carefully when
 they are available.
     Investors and security holders will be able to obtain free copies of the
 Registration Statement and the Proxy Statement/Prospectus and other documents
 filed with the SEC by Industrial Data Systems Corporation through the web site
 maintained by the SEC at http://www.sec.gov.  Furthermore, investors and
 security holders will be able to obtain free copies of the Registration
 Statement and the Proxy Statement/Prospectus from IDS by contacting IDS
 Investor Relations at 281 821-3200, extension 215.
     Industrial Data Systems Corporation and Petrocon Engineering, Inc., and
 their respective directors, officers and certain members of their management
 and employees may be soliciting proxies from Industrial Data Systems
 Corporation or Petrocon Engineering, Inc.'s stockholders in connection with
 the transaction.  A description of any interests that Industrial Data Systems
 Corporation and Petrocon Engineering, Inc.'s directors and executive officers
 have in the transaction and their security holdings will be available in the
 Registration Statement and the Proxy Statement/Prospectus.
 
 

SOURCE Industrial Data Systems Corporation
    HOUSTON, April 3 /PRNewswire/ -- Industrial Data Systems Corporation
 (Amex:   IDS) and Petrocon Engineering, Inc. ("Petrocon") today announced that
 they have signed a Letter of Intent relating to their proposed merger.
 Petrocon is a privately-held, full service, international engineering and
 control systems firm with approximately 800 employees and 2000 revenues of
 $68 million.  IDS is a service provider and specialty manufacturer, which
 through its largest subsidiary, provides engineering and control system
 services for pipeline and production facilities.  Based in Houston, Texas, IDS
 has approximately 175 employees and 2000 revenues of $17 million.
     The transaction will be effected as a stock for stock merger and is
 subject to the approval of the Board of Directors and stockholders of both
 companies and to customary closing conditions.  IDS will issue 9.8 million
 shares of its Common Stock in return for 100% of Petrocon stock.  The stock to
 be issued to Petrocon shareholders will represent approximately 43.0% of the
 22.8 million shares that will be outstanding after closing.  The combined
 companies are projected to have 2001 pro forma revenues of approximately
 $96 million, total assets of $37 million and stockholders' equity of
 $14 million.  It is planned that Mike Burrow, CEO of Petrocon, will serve in
 the same capacity for IDS and that William A. Coskey, founder, current CEO and
 President of IDS, will serve as President of the combined companies.
     There are many strategic reasons for the proposed combination.  IDS
 believes that the merger with Petrocon will provide it with: 1) a more
 extensive record of performing projects in the downstream segment of the oil
 and gas industry which includes refining, petrochemical and process related
 facilities; 2) an enhanced capability in the area of control systems and
 advanced control technology; and 3) a well recognized field inspection
 services, plant maintenance and construction management operation.  There is
 very little overlap in the two companies' client base or services provided.
 In addition, the combination provides for increased geographical coverage in
 the primary U.S. energy marketplaces of South Louisiana, Texas and Oklahoma,
 with continued access to all U.S. and international projects.
     The letter of intent also provides that, in exchange for forgiveness of
 certain indebtedness, IDS' majority shareholder, Alliance 2000, Ltd.,
 ("Alliance") will grant IDS the option to redeem 4,000,000 shares of IDS
 Common Stock.  The option is not expected to be exercisable until mid-2003.
 William A. Coskey and Hulda L. Coskey are directors and officers of IDS and
 also serve as general partners of Alliance.
     A significant Petrocon creditor is also a party to the Letter of Intent
 and has agreed to convert approximately $9 million of Petrocon debt into
 2.5 million shares of newly issued IDS Series A Convertible Preferred Stock
 (convertible into approximately 1,050,000 shares of Common Stock), in addition
 to receiving cash, and a promissory note.
     In a statement issued regarding the merger with Petrocon, William A.
 Coskey, Chairman and CEO of IDS, commented, "IDS is very excited about the
 opportunity presented by the proposed combination of the our two companies.
 Together, we believe the company will have the size and breadth to fully
 service our combined client base.  We expect to be a major force in the energy
 engineering marketplace with the potential for additional growth and increased
 earnings."
     Also commenting on the merger, Mike Burrow, Chairman, President and CEO of
 Petrocon stated, "From our many meetings with IDS, it is evident that we share
 the same 'core values' and similar visions for our companies.  We see the
 strategic advantages for shareholders, customers, and employees of combining
 our operations."
 
     About Petrocon Engineering, Inc.
     In business since 1973, Petrocon provides a broad range of services to the
 refining, chemical, petrochemical, exploration, production, co-generation,
 manufacturing, process control and advanced automation sectors.  Petrocon
 subsidiaries include: Petrocon Construction Resources, Inc., which focuses on
 field inspection services, process plant operations and construction
 management; Petrocon Systems, Inc., which is a full service control systems
 integration and advanced automation technology company; Triangle Engineers and
 Constructors, Inc., which provides engineering, design and construction
 services to refining, chemical and petrochemical industries; and RPM
 Engineering, Inc./Barnard and Burk Industries, a full service multi-discipline
 engineering company located in Baton Rouge, Louisiana with more than a 50 year
 history of providing quality engineering services.  Petrocon has offices in
 Houston and Beaumont, Texas and Baton Rouge and Lake Charles, Louisiana.
 Petrocon's CEO, Mike Burrow, has completed 18 acquisitions of engineering
 services companies during his career.  Further information about the company
 is available at http://www.petrocon.com.
 
     About Industrial Data Systems Corporation
     Industrial Data Systems Corporation is a service provider and specialty
 manufacturer.  IDS provides consulting services to the pipeline and process
 industries for development, management and turnkey execution of engineering
 projects.  Manufactured products include conditioned power systems and HVAC
 equipment.  Further information about the company is available at
 http://www.idscorporation.com.
 
     Safe Harbor for Forward-Looking Statements
     Except for the historical information contained herein, this news release
 contains forward-looking statements, including, without limitation, statements
 containing the words, "believes," "anticipates," "expects" and words of
 similar import, other statements about Industrial Data Systems Corporation and
 Petrocon Engineering, Inc.'s managements' future expectations, beliefs, goals,
 plans and prospects, and statements regarding the likelihood and timing of the
 closing of the merger, the expected benefits and synergies of the merger, the
 ability of the combined company to successfully provide products and services
 after the merger, and the future growth of the markets served by the
 companies.  Such forward-looking statements have known and unknown risks,
 uncertainties and other factors that may cause the actual results, performance
 or achievements of Industrial Data Systems Corporation, Petrocon Engineering,
 Inc., the combined company or industry results to be materially different from
 any future results, performance or achievements expressed or implied by such
 forward-looking statements.  Such factors include, among others:  risks
 associated with difficulties in successfully integrating Industrial Data
 Systems Corporation and Petrocon Engineering, Inc.'s businesses and
 technologies; costs related to the merger; failure to obtain required
 director, stockholder or regulatory approvals of the merger; failure of the
 combined company to retain and hire key executives, technical personnel and
 other employees; difficulty of successfully managing a large organization;
 potential inability to maintain business relationships with clients and
 suppliers, rapid technological changes; competition in the consulting
 engineering industry; consolidation and cost pressures in the industry, and
 other risk factors.  Reference is hereby made to cautionary statements set
 forth in the Company's Form 10-KSB for the year ended December 31, 2000, Form
 10-QSB for the quarters ended March 31, June 30, and September 30, 2000,
 current Forms 8-K, and other SEC filings.  The forward-looking statements
 contained in this news release are made as of the date hereof and Industrial
 Data Systems Corporation and Petrocon Engineering, Inc. do not assume any
 obligation to update the reasons why actual results could differ materially
 from those projected in the forward-looking statements.
 
     Important Information Will Be Filed With the SEC
     Industrial Data Systems Corporation plans to file with the SEC a
 Registration Statement on Form S-4 in connection with the transaction, and
 expects to file with the SEC and mail their stockholders a Proxy
 Statement/Prospectus in connection with the transaction.  The Registration
 Statement and Proxy Statement/Prospectus will contain important information
 about Industrial Data Systems Corporation and Petrocon Engineering, Inc, the
 transaction and related matters.  Investors and security holders are urged to
 read the Registration Statement and Proxy Statement/Prospectus carefully when
 they are available.
     Investors and security holders will be able to obtain free copies of the
 Registration Statement and the Proxy Statement/Prospectus and other documents
 filed with the SEC by Industrial Data Systems Corporation through the web site
 maintained by the SEC at http://www.sec.gov.  Furthermore, investors and
 security holders will be able to obtain free copies of the Registration
 Statement and the Proxy Statement/Prospectus from IDS by contacting IDS
 Investor Relations at 281 821-3200, extension 215.
     Industrial Data Systems Corporation and Petrocon Engineering, Inc., and
 their respective directors, officers and certain members of their management
 and employees may be soliciting proxies from Industrial Data Systems
 Corporation or Petrocon Engineering, Inc.'s stockholders in connection with
 the transaction.  A description of any interests that Industrial Data Systems
 Corporation and Petrocon Engineering, Inc.'s directors and executive officers
 have in the transaction and their security holdings will be available in the
 Registration Statement and the Proxy Statement/Prospectus.
 
 SOURCE  Industrial Data Systems Corporation