Los Angeles, CA, Jan. 13, 2005 -- Ares Management LLC and Kinetic Systems, Inc., the leading global provider of process system solutions focused on the semiconductor, biotechnology and pharmaceutical industries, jointly announced today that Ares' private equity fund, the Ares Corporate Opportunities Fund, L.P. (ACOF), along with other existing debt holders and shareholders have converted substantially all outstanding subordinated debt and shareholders notes into common stock of the recapitalized Kinetics.
In addition to the debt conversion, Celerity Group Inc., a leader in the design and production of subsystems and components that are integral to the manufacturing of semiconductors, flat panel displays, and related products, and other affiliates of Kinetics have completed the sale of substantially all their assets to the Texas Pacific Group for a combination of cash and stock. Kinetics and its controlling shareholder will retain an ownership interest of approximately 20% in the acquiring entity, Celerity Holding Company, Inc..
As a result of the Kinetics recapitalization and Celerity asset sale, Kinetics' outstanding indebtedness has been reduced from approximately $385 million to approximately $40 million, increasing the ability of the Company to pursue its many growth opportunities worldwide. Ares is now the Company's controlling shareholder and MidOcean Capital Partners, Gryphon Investors, and Behrman Capital retain a significant equity ownership in Kinetic Systems.
In addition, the Company has reorganized its board and restructured its executive management team. Charles Masson of Masson & Company, a New York-based advisory firm, will serve as interim Chairman. Kurt Gilson, currently President, will serve as Chief Executive Officer and President; Robert Pragada, currently East and Europe Region President, has been named Chief Operating Officer and Hugh Rovit, also of Masson & Company, has been appointed interim Chief Financial Officer.
Gilson said: "The new management structure reflects an exciting combination of industry experience and financial expertise. Our new capitalization with significantly less debt is now more appropriate for our industry and allows us to better compete in our markets and service the dynamic needs of our customers. We look forward to focusing on our core platform and further strengthening our position as the global leader in high purity process solutions."
Antony P. Ressler, managing partner of Ares, said: "We are excited to partner with a management team that has created a superb brand and reputation for service and quality. The company, with its dramatically improved capitalization and focus on its core business, should continue to enjoy significant growth, leveraging the strength of its long term customer relationships and broad service offering."