REDHAWK AGREES TO ACQUIRE MAJORITY STAKE IN MINT LEASING, INC.
RedHawk Begins Trading on the OTCQB Market
Youngsville, Louisiana (OTCQB: IDNG) – RedHawk Holdings Corp. (the “Company”) announced today that RedHawk Financial Services LLC, a wholly-owned subsidiary of the Company, has agreed to acquire more than 90% of the outstanding capital stock of Mint Leasing, Inc. (“Mint”). Concurrent with the Mint acquisition, RedHawk Land & Hospitality, LLC, the Company’s commercial real estate investment company, will acquire 100% of the outstanding membership interests in VJ Holdings, LLC (“VJ”), a Texas-based commercial real estate limited liability company and an affiliate of Mint.
The Company also announced today that it has received approval to begin trading on the OTCQB Market.
Mint (OTC: MLES) provides automobile leasing and fleet vehicles to the commercial and consumer markets throughout the United States. Most customers are located in Texas and seven other states in the Southeast. Lease transactions are solicited and administered by Mint’s sales force and staff. Mint’s leasing customers are provided from brand-name automobile dealers that seek to provide leasing options to their commercial and individual customers, many of whom would not have the opportunity to acquire a new or late-model-year vehicle. Mint currently has approximately 450 vehicles under lease and 600 automotive dealers under contract.
The commercial real estate owned by VJ is currently under long-term lease to Mint for its corporate offices and warehousing of its vehicle inventory held for sale or re-lease. The valuation of the commercial real estate owned by VJ was based upon an independent third party appraisal authorized by the financial institution providing VJ with its real estate financing.
The total purchase price for the Mint shares and the VJ membership interests being acquired consists of up to 25 million restricted shares of RedHawk’s common stock, $300,000 in cash, and the assumption of VJ’s real estate bank indebtedness. The restricted shares will vest pursuant to certain mutually agreed upon performance milestones.
Commenting on the proposed acquisition, G. Darcy Klug, the Company’s Chief Financial Officer, said, “At its height, Mint reported more than $5 million of EBITDA, revenues topping $50 million, and approximately 2,500 vehicles under lease. Mint’s primary lender fell victim to the financial collapse of 2008, resulting in Mint losing its vehicle lease financing floor plan. Mint has since been unable to re-establish a satisfactory warehouse leasing floorplan. We believe we can re-establish the solid credit facilities necessary for Mint to resume profitable operations.”
“We like the equipment rental and the equipment leasing business sectors,” continued Klug. “As such, we expect further strategic and organic expansion in the area. Additionally, we believe Mint fits nicely within our diversified business model for equipment sales and leasing, including future sales and leasing of the Centri Controlled Entry System, our full-body scanner which is now in final testing.”
Klug added, “Jerry Parish, the President of Mint, has spent his entire professional career in the automotive industry. He has served as both Sales Manager and General Manager for numerous well-recognized, Texas-based automobile dealerships. Jerry has received numerous Salesman of the Year awards and in the 17 years since founding Mint, built the company into a well-respected, well-recognized automobile leasing company. He will be an outstanding addition to the RedHawk management team. We are thrilled to have someone like Jerry join the RedHawk team as we provide Jerry with the management support to re-build Mint, return Mint to profitability, and re-establish Mint as a leading provider of vehicle leasing to the commercial and consumer markets throughout the United States.”
Closing is expected to be completed on or before October 31, 2016 and is contingent upon completion of satisfactory due diligence, approval by the board of directors of both companies, completion of new equipment financing under terms acceptable to the Company, bank approval of the assumed real estate indebtedness, finalization of the terms and conditions of the definitive purchase agreement, and satisfactory completion of legal and financial due diligence. The acquisition is subject to a $500,000 break-up contingency fee should Mint elect not to complete the transaction.