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Phoenix divests Altama Military Footwear Division
03
Jan '08
Phoenix Footwear Group Inc announced that it has sold its Altama military footwear division to Tactical Holdings Inc which is the owner of Wellco Enterprises. Tactical Holdings is a portfolio company of Golden Gate Capital, a San Francisco-based private equity investment firm. Concurrent with the closing, Phoenix Footwear also entered into a short-term transition services agreement with Tactical Holdings.

Under the terms of the transaction, Phoenix is to receive approximately $15 million in total consideration under the stock purchase and transition services agreements, including $14.25 million on or before February 28, 2008.

At the time of payment, $3 million will be placed into an escrow account to secure Phoenix Footwear's indemnification obligations. The net proceeds will be applied to the reduction of Phoenix Footwear's bank debt.

Commenting on the transaction, James Riedman, Phoenix Footwear's Chairman, said, “The sale of Altama is an important part of continued improvements to our capital base. In addition to the direct cash it raises, it is expected to offset all of the capital taxes which arose from our gain earlier in the year with our Royal Robbins divestiture.

The net effect of the sale and tax benefits should be to largely extinguish our debt by the end of fiscal 2008 in the absence of any extraordinary events. We believe this step enhances our prospects and allows us to concentrate on generating shareholder returns with our remaining brands.”


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