SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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CD&L, INC.
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VELOCITY EXPRESS SIGNS DEFINITIVE AGREEMENT TO ACQUIRE CD&L, INC.
MERGER WILL MAKE VELOCITY THE MARKET LEADER
IN TIME-CRITICAL LOGISTICS SOLUTIONS
WESTPORT, CT, July 5, 2006 -- Velocity Express Corporation (NASDAQ: VEXP) and
CD&L, Inc. (AMEX:CDV) today announced that they had signed a definitive
agreement for Velocity to acquire CD&L, Inc. in a fully-financed, two-step, all
cash transaction for $3.00 per share. The acquisition will make Velocity the
largest time-critical logistics company in North America, with more than $450
million in annual revenues and 5,500 independent contractor drivers, operating
from 150 locations in leading markets across the United States and Canada.
"This transaction makes enormous economic and operating sense, and will enable
us to fully capitalize on the many capabilities of both companies," said Vincent
Wasik, Chairman and CEO of Velocity Express. "Velocity Express and CD&L operate
in many of the same geographies and serve similar Fortune 500 and local
customers, utilizing a proven independent-contractor business model. The
combination of the two companies will allow Velocity to leverage its technology
and operating infrastructure across CD&L's diverse and loyal customer base and
to identify and deploy 'best practices' representing the operating strengths of
both companies. The Company will be strongly positioned financially to satisfy
the national logistics needs of corporations looking for an outsourced service
provider in the time critical market, and also one devoted to the highest levels
of customer care."
Al Van Ness, Chairman and CEO of CD&L said, "This transaction recognizes the
value that has been created in CD&L. It is rewarding to know that the CD&L
Management that were responsible for CD&L's success will be partnering with the
key people at Velocity in order that the combined company will be able to create
the same value proposition for the shareholders of the combined entity and the
enlarged customer base. I am sure, under the stewardship of Mr. Wasik, that the
shareholder valuation and customer care will be maximized."
"Velocity Express has assembled a strong integration team comprised of members
of Velocity Express, CD&L, and consultants from Alvarez & Marsal to ensure a
smooth transition and rapid value creation to shareholders," said Mr. Wasik.
With the combined company, route density will be enhanced, providing existing as
well as new customers with a competitive service offering. The Company also
believes that it will be able to gain numerous operating efficiencies as it
eliminates many duplicate costs. As part of the integration, CD&L Board Director
Thomas E. Durkin III has been named Lead Integration Director of CD&L. During
the transition period, prior to formal shareholder approval, Durkin will
coordinate integration efforts on the CD&L end. Once shareholder approval is
complete, Durkin will be asked to join the combined company's Board and continue
to play an integral role in the integration.
A key element in the acquisition will be the strengthening of Velocity's
excellent managerial team with the addition of the senior management team from
CD&L, as well as a talented sales and operational team. Bill Brannan (President
and COO), Michael Brooks (Group President), Russ Reardon (CFO), and Mark
Carlesimo (General Counsel), all will be joining Velocity in key executive
positions. Mr. Wasik stated, "Our vision is to double the size of the company
within the next few years as we use our proprietary track and trace technology
and electronic signature capture, together with our industry-leading service
metrics, to satisfy the time critical demands of customers in industry sectors
such as healthcare, retail, service parts replenishment and financial
institutions."
Velocity has acquired in private transactions CD&L convertible
securities that account for 49% of that company's common shares and executed
voting agreements with fewer than ten selling note holders holding an additional
8% of CD&L common shares to vote their shares in favor of a merger with Velocity
Express Corporation. Velocity has agreed to certain restrictions on its ability
to exercise its voting rights to enable CD&L's Board to exercise its fiduciary
duties. A meeting of CD&L shareholders will be held for the purpose of approving
the Merger. A date for the meeting has not been set. There are approximately 22
million fully diluted shares of CD&L. The combined entity will operate under the
Velocity Express name and be headquartered in Westport, CT. The transaction is
anticipated to close in mid August.
In connection with the signing of the acquisition agreement, the Company sold 4
million shares of its Series Q Convertible Preferred Stock for a total
consideration of $40 million and 75,000 units of its 12% Senior Secured Notes
due 2010 for a total consideration of $70.7 million. The 12% Senior Secured
Notes consist of a Note with a face value of $1,000 and 345 Warrants to purchase
Velocity Express common shares at an exercise price of $1.45 per share.
Simultaneously with this financing, the Company paid off and terminated its
revolving credit facility and Senior Subordinated Note.
VELOCITY EXPRESS CORPORATION
Velocity Express has one of the largest time definite nationwide delivery
networks, providing a national footprint for customers desiring same day service
throughout the United States. The Company's services are supported by a
customer-focused technology infrastructure, providing customers with the
reliability and information they need to manage their transportation and
logistics systems, including a proprietary package tracking system that enables
customers to view the status of any package via a flexible web reporting system.
Visit www.velocityexpress.com for more information.
ABOUT CD&L, INC.
CD&L, Inc. operates from 98 locations in 25 states, including operations in 28
customer owned facilities, providing last mile delivery solutions to various
industries. The company has over 1,500 employees and utilizes approximately
2,900 independent contractor drivers to provide time-sensitive delivery services
to thousands of customers across the country.
For purposes of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers should be aware that this press release
includes certain "forward-looking statements" that involve risks and
uncertainties that could cause actual results to differ materially. These
statements are typically preceded by words such as "believes," "expects,"
"anticipates," "intends," "will," "may," "should," or similar expressions. Such
statements are based upon, among other things, assumptions made by, and
information currently available to, management, including management's own
knowledge and assessment of the industry in which Velocity and CD&L operate.
Factors that may cause actual results to differ materially from those expressed
or implied by such forward-looking statements include, but are not limited to,
the risk of successful integration of the two companies, the ability to achieve
enhanced route density, the ability to retain customers, independent contractors
and employees, the ability to achieve operating efficiencies and eliminate
duplicate costs, the ability to double the size of the company, as well as the
risks and uncertainties detailed from time to time in the Velocity Express and
CD&L's filings with the Securities and Exchange Commission, including their most
recently filed reports on Form 10-Q and 10-K. Velocity Express and CD&L disclaim
any obligations to update any forward-looking statement as a result of
developments occurring after the date of this press release or to conform them
to actual results.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, CD&L INTENDS TO FILE A PROXY
STATEMENT AND OTHER RELEVANT MATERIALS WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC"). CD&L'S STOCKHOLDERS ARE URGED TO READ THE PROXY
STATEMENT (AND ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER MATERIALS WHEN
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. CD&L's
stockholders will be able to obtain free copies of the proxy statement, when it
becomes available, as well as the other relevant materials, without charge, at
the SEC's Web site (http://www.sec.gov). Copies of CD&L's filings may also be
obtained without charge from CD&L at CD&L's Web site (www.cdl.net) or by
directing a request to CD&L, Inc., Secretary, 80 Wesley Street, South
Hackensack, New Jersey 07606.
CD&L and its directors and executive officers and other members of management
and employees are potential participants in the solicitation of proxies in
respect of the proposed merger. Information regarding CD&L's directors and
executive officers is available in CD&L's 2005 Annual Report on Form 10-K filed
with the SEC on April 4, 2006 and CD&L's proxy statement for its 2006 annual
meeting of stockholders, filed with the SEC on April 28, 2006. Additional
information regarding the interests of such potential participants will be
included in the proxy statement, and the other relevant documents filed with the
SEC when they become available.
Contact:
Velocity Express, Inc.
Edward W. (Ted) Stone, 203-349-4199
tstone@velocityexp.com
or
Steven S. Anreder, 212-532-3232
steven.anreder@anreder.com
For CD&L:
Russell Reardon, 201-487-7740
russ_reardon@cdl.net
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Source: Velocity Express, Inc.