Tucker-based Video Display Corp.’s shares rose Thursday after the company said it will sell off part of its business in a mostly cash deal that will eliminate some of its debt.
Video Display manufactures and distributes cathode ray tubes used in TV sets and computer monitors. The company said a year ago that it was looking for a buyer interested in the entire company or parts of it.
The company said it has a definitive agreement to sell its Z-Axis Inc. subsidiary to the unit’s New York-based management team. The sale, expected to close next month, also includes Video Display’s BEAR Power Supplies and Boundless Technologies business units.
The subsidiaries primarily design and manufacture specialty power supplies and offer contract manufacturing services to customers in New York, New England and the mid-Atlantic. Video Display said Phelps, N.Y.-based Z-Axis accounted for about a fifth of its revenues.
Although the selling price was not disclosed, Video Display said 90 percent of the deal is cash.
“Subsequent to closing of the Z-Axis transaction, VDC will have accomplished its prime goal of eliminating all bank revolver and term debt, leaving the company with substantial cash reserves,” CEO Ron Ordway said in announcing the sale. “We are continuing to discuss the sale of additional subsidiaries with parties interested in acquiring segments of the VDC family of display companies and will report on progress of those negotiations as it occurs.”
The company said it was seeking to sell all or parts of its operations to increase shareholder value. Its shares closed up 5 percent Thursday at $3.86.
The company was founded in 1975 by Ordway and Al Kenerleber of Stone Mountain, who was president and chief operating officer until his death in 1998 after being struck by a vehicle while walking his two Great Danes.
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