By acquiring Somerset, N.J.-based NMS's U.S. and Canadian operations, SPAR is executing its plan to close transactions that are synergistic to its core businesses by adding profitable businesses with strong customer [image-nocss] relationships, while experiencing minimal to no dilution for shareholders. This transaction is in line with the company's strategy to seek opportunities that will accelerate growth.
This acquisition is being funded with existing working capital and will not be dilutive to SPAR's shareholders. The final purchase price of the acquisition is subject to financial performance covenants based on 2010 and 2011 year end revenue performance.
NMS consists of two profitable entities that will add to SPAR's merchandising and marketing services business including further expansion throughout United States and Canada, while providing exposure to a new client base. NMS's U.S. operations are divided into two merchandising segments. The general merchandising business will be incorporated into SPAR's U.S. operations, and its furniture assembly business will continue to operate as a separate division with its own dedicated management and work force. This operation is responsible for assembling furniture in both major retailers and in homes and small businesses for the customers of these large retailers.
The NMS's Canadian operations perform similar merchandising and marketing services as its current business and will be incorporated into SPAR's existing Canadian operation.
With the close of the acquisition, key members of the NMS team will be retained by SPAR Group's respective subsidiaries and daily operations will be consolidated and reside under SPAR's U.S. and Canadian divisions. Bill Brenner, president of NMS, will retain a key management role with SPAR related to the acquired assets.
"We are pleased to announce the successful completion of this asset acquisition which adds a considerable amount of new clients and revenue, while being nondilutive to our shareholders. As we enter 2010, management has identified several other potential high quality transactions that will materially grow our business," said Gary Raymond, president and CEO of Tarrytown, N.Y.-based SPAR.
He added, "Bill Brenner and his team at NMS have built a strong business and reputation in the retail merchandising and services market over the last 25 years with prominent national and international retailers and manufacturers. The addition of NMS to our portfolio of merchandising and marketing service offerings will allow us to strengthen our long-term competitive position in our targeted markets and enable us to service a much broader range of retailers and manufacturers."
Founded more than 27 years ago by Phil Brenner, NMS was a privately held company providing merchandising services to a variety of manufacturing and retail partners throughout the United States and Canada. NMS last year serviced nearly a half million retail locations throughout North America. The company had nearly 2,000 employees, managed nationally and in Canada through four geographic regions and 26 districts.
SPAR is a diversified international merchandising and marketing services company that helps companies improve sales, operating efficiency and profits at retail locations.It provides product services, project services, in-store events, radio frequency identification (RFID), technology services and marketing research covering all product and trade classifications, including mass market, drug store, convenience store and grocery chains. Product services include product additions; placement, reordering, replenishment, labeling, evaluation and deletions, and project services include seasonal and special product promotions, product recalls and complete setups of departments and stores.
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