Exhibit 99
Contact:Jerome I. Feldman Scott N. Greenberg
President & Executive Vice President &
Chief Executive Officer Chief Financial Officer
(212) 230-9508 (212) 230-9529
GP STRATEGIES REPORTS TERMINATION OF MERGER AGREEMENT WITH AN AFFILIATE
OF VERONIS, SUHLER & ASSOCIATES
New York, New York, February 14, 2000 . . . . GP Strategies Corporation
(NYSE:GPX) reported today that it has terminated its previously announced
merger agreement with VS&A Communications Partners III, L.P. ("VS&A"), an
affiliate of Veronis, Suhler & Associates Inc., pursuant to which holders of
outstanding shares of the Company would have received $13.75 per share
(including the associated rights), payable in cash.
VS&A had informed the Company that it believes that the Company
suffered a material adverse change in the fourth quarter of 1999 and that the
conditions to VS&A's obligation to consummate the merger contemplated by the
merger agreement therefore may not be fulfilled. VS&A also said that it did
not intend to waive the conditions to its obligation. Since certain members
of the Company's management were participating in the proposed VS&A merger,
the Special Negotiating Committee of the Board of Directors, which evaluated
and recommended the proposed VS&A merger, was empowered to consider the
Company's options.
The Committee and its advisors attempted to negotiate an alternative
transaction with VS&A, but were unable to do so on acceptable terms. The
Committee also determined that prompt action was necessary to preserve value
for the Company's stockholders and that it would be imprudent to continue
with the proposed VS&A merger given that there would be no assurance that
VS&A would have an obligation to close. Therefore, the Special Negotiating
Committee unanimously recommended that the proposed VS&A merger be
terminated. The Board of Directors agreed that this was the best course of
action for the Company's stockholders, and believes that this early
termination will enable senior management and the Board of Directors to focus
their efforts on improving core operations, as well as continuing sales of
non-core assets. In addition, the Company will continue to explore strategic
initiatives and implement steps to improve stockholder value and continue to
reduce its operating expenses.
(more)
To induce VS&A to agree to the immediate termination of the merger
agreement and to give the Company a general release, the Company issued to
VS&A, as partial reimbursement of the expenses incurred by it in connection
with the merger agreement, 83,333 shares of the Company's Common Stock and an
18-month warrant to purchase 83,333 shares of the Company's Common Stock at a
price of $6.00 per share.
The Company's General Physics subsidiary suffered a severe downturn in
the fourth quarter of 1999, due to increased losses in its IT Training
operations as well as a slowdown in the remainder of General Physics'
operations. The Company believes that the results were primarily due to
clients diverting potential training dollars for possible Y2K issues, a lack
of new software product introductions and product sales in the IT area,
delays in plant launches, and a general weakness in the technology
enhancement business because of customer concerns with Y2K. The Company took
certain steps in the fourth quarter to change the focus of its information
technology and consulting services, including further streamlining its IT and
consulting operations by closing or consolidating offices, terminating
employees, and reducing related costs. As a result, the Company is evaluating
certain additional write-offs. Based on discussions with its banks, the
Company believes that its bank agreement will be amended to eliminate the
technical defaults that exist with respect to certain financial covenants as
a result of the restructuring charges taken by the Company during 1999 and
the related losses.
The Company believes that the downturn in the fourth quarter of 1999 does
not diminish the Company's future potential. The Company believes that it is
still well positioned and unrivaled in its scope of services, the quality and
performance of its people, and its ability to service clients around the
world. After many years of dramatic growth in its commercial training
operations, GP Strategies is the largest custom technical training company in
the world with a very strong base of Fortune 500 clients and a full scope of
training and performance improvement services. The Company anticipates that
business will start improving in the second quarter of 2000. The Company
recently received several major awards from Fortune 500 corporations. In
addition, it is anticipated that new software products (such as Microsoft
2000) will be introduced shortly which should result in increased demand for
the Company's IT training services. The Company has reduced its corporate
staff and consolidated certain general and administrative functions and is
exploring further changes to reduce costs, including expenses relating to
facility costs. The Company intends to continue to evaluate the sale of
non-core assets and recently sold substantially all of its remaining shares
in GTS Duratek, Inc.
The forward-looking statements contained herein reflect GP Strategies'
management's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those in the forward-looking statements, all of which are difficult to
predict and many of which are beyond the control of GP Strategies, including,
but not limited to the risk that the Company will not be able to obtain
amendments to its loan agreement to eliminate existing defaults and those
risks and uncertainties detailed in GP Strategies' periodic reports and
registration statements filed with the Securities and Exchange Commission.
# # #