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Velocity Express sells substantially all assets to ComVest subsidiary
By Caroline Salls
Pittsburgh, Nov. 6 - Velocity Express Corp. received court approval of the sale of substantially all of its assets to ComVest Velocity Acquisition I, LLC, according to an 8-K filed Friday with the Securities and Exchange Commission.
ComVest Velocity is a subsidiary of private investment firm ComVest Investment Partners III, LP.
The purchase price includes $9.77 million, which will be applied to the repayment of senior notes, plus the outstanding obligations under the company's debtor-in-possession agreement and Burdale credit agreement, cure costs and $50,000 in cash.
The buyer will also assume liabilities associated with the purchased assets and pay cure costs of assumed contracts, subject to a $250,000 cap.
"With ComVest as our new owner and partner, we believe we will now have the financial and operational support we need to grow our business aggressively and profitably," Velocity chairman and chief executive officer Vincent A. Wasik said in the release.
"This transaction will reduce the burden of our legacy liabilities by eliminating over $100 million of debt, creating a financially stronger, well capitalized company.
"With a better 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," he added.
The sale is expected to close in about 10 days.
Velocity Express, a regional delivery services provider based in Westport, Conn., filed for bankruptcy on Sept. 24 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-13294.
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