Velocity Express Corporation (Acquired by Comvest Group)

Note: This company is no longer trading as a separate enterprise.

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2009

September - Velocity Express Corporation, the USA's largest provider of time definite regional delivery solutions, announced that it had reached an agreement with a subsidiary of ComVest Investment Partners III, L.P., a leading private investment firm. Under the agreement, ComVest would begin a process to become the Company's new majority owner and significantly deleverage the Company through an exchange of debt for equity in Velocity.

Vincent A. Wasik, Velocity's Chairman and Chief Executive Officer, stated, "We believe that this transaction is a major win for Velocity, our Customers, Independent Contractors and Employees. It will reduce the burden of our legacy liabilities by eliminating over $100m of debt and create a financially stronger, well capitalized company. With a stronger financial position, we will continue to be able to pursue large business development opportunities, and increase our investment in technology and services to benefit our valued Customers. We will also have the backing and support of a new strong financial and operating partner in ComVest. Thanks to the continued support and hard-work of our more than 4,000 dedicated Employees and Independent Contractors, we expect this transition to be seamless to our Customers."

Jose Gordo, a Partner at ComVest, said, "ComVest is truly excited about the future prospects of Velocity. We believe that this restructuring will eliminate the significant debt that has burdened the Company for the last few years and turn the Company's balance sheet into a major strength. Velocity has a solid operational foundation with outstanding long-term Customers and a strong sales pipeline. Together, we look forward to continuing to provide Velocity's Customers with the timely, high-quality service they have come to expect."

Velocity's restructuring would be accomplished through a pre-packaged Section 363 sale pursuant to Chapter 11 of the United States Bankruptcy Code. The change in ownership would be achieved through a restructuring of Velocity's balance sheet in which ComVest would exchange its Velocity debt for a controlling equity ownership interest. Upon the completion of the transaction, ComVest would own the substantial majority of Velocity's equity. The management team, which would remain in place, would own a minority stake in the restructured Company, as would former bondholders.

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June - Velocity Express Corporation announced that it had executed a conditional letter of intent to acquire control of the company from a management buyout group led by Mr. Vincent A. Wasik, Velocity's Chairman and Chief Executive Officer, and backed by Mr. Wasik's private equity firm MCG Global, LLC.

The transaction was subject to a number of conditions, including financing, continued listing on Nasdaq, continuation of a senior credit facility and the approval of the Noteholders and the company's preferred and common stockholders. There was no obligation on the part of the company to negotiate exclusively with the Management Buyout Group, but the Group would be entitled to expense reimbursement, up to a maximum of $150,000, if another transaction was accepted.

The terms of the transaction, while not final, would involve issuances of a substantial number of shares of common stock, which would likely substantially dilute the value of the currently outstanding shares. Nasdaq had given the company until August 3, 2009 to come into compliance with its $2.5m stockholders' equity requirement for continued listing.

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Velocity Express, together with its subsidiaries, provides same-day transportation and distribution/logistics services to individual consumers and businesses. The Company's service offerings are divided into three principal categories: scheduled logistics, distribution logistics and expedited logistics. Scheduled logistics consist of the daily pickup and delivery of parcels with narrowly defined time schedules predetermined by the customer.

Distribution logistics consist of the receipt of customer bulk shipments that are divided and sorted at metropolitan locations and delivered into multiple routes with defined endpoints and more broadly defined time schedules. Expedited logistics consist of expedited point-to-point service for customers with time-sensitive delivery requirements. The Company operates primarily in the United States with limited operations in Canada. Its customers are comprised of multi-location, blue chip customers with operations in the commercial and office products, financial, healthcare, transportation and logistics, technology and energy sectors.

Velocity operates in the same-day, time-critical logistics industry, which includes scheduled and non-scheduled, same-day transportation of documents and packages in local and inter-city markets.

In 2007, its revenues were $410.1m.