SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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UNITED ROAD SERVICES, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Press Release of United Road dated May 31, 2000
URSI ANNOUNCES $93 MILLION DEBT FINANCING AND $2 MILLION EQUITY
INVESTMENT LED BY GE CAPITAL
Albany, N.Y., May 31, 2000 United Road Services, Inc. (OTC: URSID) announced
today that it has completed the next step in its turn-around plan.
As previously announced, KPS Special Situations Fund, L.P. ("KPS"), a private
equity fund, has agreed to invest $25 million in the Company in exchange for
participating convertible preferred stock. In addition to this preferred stock
investment, the Company has received a commitment from GE Capital to provide the
Company with a $93 million senior secured revolving credit facility (which
amount may increase to up to $100 million depending upon the success of
syndication efforts). The commitment is pursuant to a commitment letter which
the Company has signed with GE Capital and is subject to the terms and
conditions set forth in the commitment letter. Fleet Capital Corporation has
committed to fund up to $40 million of the credit facility.
CFE, Inc., an affiliate of GE Capital, has also committed to invest $2 million
in additional participating convertible preferred stock subject to the terms and
conditions set forth in GE Capital's commitment letter.
The proceeds of the new financing will be used to replace the approximately $54
million of outstanding debt under the Company's revolving credit line.
Approximately $81 million of existing convertible subordinated debentures will
be amended and will remain outstanding. Following completion of the new
financing and payment of fees and expenses, the Company will have no less than
$25 million available for investment in its business. Donaldson, Lufkin and
Jenrette Securities Corporation is advising the Company on the transaction.
The preferred stock transactions with KPS and CFE, Inc. will be presented to the
Company's stockholders for their approval.
Gerald Riordan, Chief Executive Officer of the Company commented "We are excited
with this announcement of the next step in our turn-around plan. In addition to
KPS, we welcome GE Capital as an investor in the Company's future. GE Capital
will be a valuable partner in the future success of United Road Services. We
have a new and committed management team, a clear action plan which is beginning
to show improvement, customers that value our services and, with this
transaction, an enhanced capital structure to continue to invest in the
business."
Michael Psaros, a KPS principal, said, "We are pleased to have arranged senior
financing commitments for the Company and look forward to an expeditious closing
of the transaction. The KPS and GE Capital equity investments, coupled with a
new bank facility and restructuring of the Company's subordinated debentures,
should provide the Company with the financial resources to execute its
turnaround plan. We look forward to working with senior management and employees
of the Company in building a new United Road Services."
KPS is a private equity firm with over $210 million of committed capital that
focuses on constructive investing in restructurings, turnarounds and other
special situations. In connection with the preferred stock transactions with KPS
and CFE, Inc. described above, the Company will be filing a definitive proxy
statement with the Securities and Exchange Commission. STOCKHOLDERS OF UNITED
ROAD SERVICES ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders
may obtain a free copy of the proxy statement when it becomes available and
other documents filed by United Road Services with the Securities and Exchange
Commission in connection with the preferred stock transactions at the Securities
and Exchange Commission's web site at www.sec.gov. Stockholders of United Road
Services may also obtain for free the proxy statement and other documents filed
by the Company in connection with the preferred stock transactions by directing
a request to: United Road Services, Inc., 17 Computer Drive West, Albany, New
York 12205, Attention: Investor Relations.
United Road Services and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the Company's stockholders
in favor of the preferred stock transactions with KPS and CFE, Inc. These
directors and executive officers include the following: Gerald R. Riordan,
Richard A. Molyneux, Edward W. Morawski, Grace M. Hawkins, Todd Q. Smart, Mark
J. Henninger, Merril M. Halpern, Robert L. Berner, III, Michael J. Pfeffer,
Donald J. Marr, Michael A. Wysocki and Harold W. Borhauer II. Collectively as of
March 22, 2000, the directors and executive officers of United Road Services may
be deemed to beneficially own approximately 14.0% of the outstanding shares of
the Company's common stock. Stockholders of United Road Services may obtain
additional information regarding the interests of the participants by reading
the proxy statement when it becomes available.
Formed in July 1997, United Road Services has a network of 41 divisions located
in 21 states. The Company's broad range of services includes towing, impounding
and storing motor vehicles, conducting lien sales and auctions of abandoned
vehicles and transporting new and used vehicles and heavy construction
equipment. More information on United Road Services may be obtained from the
Company's web site at www.unitedroad.com.
This release contains forward-looking statements. These statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those anticipated in the forward-looking statements. Readers
should not place undue reliance on forward-looking statements, which reflect
management's view only as of the date hereof. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect
subsequent events or circumstances. Readers should carefully review the risk
factors described in documents the Company files from time to time with the
Securities and Exchange Commission.