Advanced Technical Products Inc. and two Veritas Capital Fund LP affiliates have parted ways rather than conclude a Jan. 28 merger agreement. New York-based Veritas terminated the agreement after receiving restated 1999 ATP financial statements and updated business disclosures on May 18. Veritas presented alternatives, but ATP's board rejected those transaction proposals May 24.
Now, ATP of Roswell, Ga., must reimburse Veritas for incurred expenses up to a maximum of $750,000.
ATP instead may choose to seek acquisitions, according to its 1999 10-K report filed May 22 with the Securities and Exchange Commission.
"Management is evaluating the possibility of additional acquisitions in the event the pending transaction with Veritas is not consummated," the 10-K said. "However, because of the uncertainty of the nature and size of these opportunities as well as ATP's financial leverage, there can be no assurances that the financing necessary to pay for acquisitions can be obtained."
Publicly traded ATP was formed in 1995 and has searched for financial support for more than a year.
ATP and an undisclosed financial buyer had a memorandum of understanding from April-June 1999, but talks about acquiring ATP fell through.
Veritas agreed to buy ATP for $14.50 per share Sept. 3. Following disclosure of financial irregularities at ATP's Alcore subsidiary, the deal was revised to $12.75 per share Jan. 28, contingent on audited 1999 financial statements and other conditions.
The restatement for 1999's first three quarters clipped $3.3 million from ATP sales and drove its net profit into a loss position.
As restated, ATP reported a loss of $3.2 million on 1999 sales of $179.2 million. The company employed 1,610 at year's end.
Government prime or subcontract work accounted for about 62 percent of ATP's 1999 sales. Boeing Co. represented 17 percent of total sales.
Federal agents served a search warrant Jan. 7 at Alcore, which primarily supplies aluminum and composite honeycomb core for aerospace and aircraft applications and several commercial markets. A criminal investigation continues into allegations of Alcore financial record falsification and mail fraud.
ATP's structural core materials segment includes Alcore operations in Edgewood and Belcamp, Md., and Alcore Brigantine SA in Anglet, France. The segment had 1999 sales of $19.4 million from external customers and $828,000 from other ATP segments.
Richard Zeits, ATP's corporate vice president of new business development, has taken on additional duties as Alcore president.
Other ATP manufacturing operations are located in Marion, Va.; Lincoln, Neb.; DeLand, Fla.; and Glen Cove, N.Y.