VeriChip, a provider of radio frequency identification (RFID) systems for healthcare and patient-related needs, has entered into a definitive stock purchase agreement with The Stanley Works for the sale of its wholly owned Canadian subsidiary, Xmark, for $45 million in cash.
Following the completion of the sale of Xmark, an electronic monitor manufacturer for the healthcare and security industries, to Stanley, VeriChip said it will retire all of its outstanding debt. The company expects to realize net proceeds, after retiring its debt, paying transaction-related costs and other contractual commitments, of approximately $21.4 million.
Under the terms of the stock purchase agreement, $4.5 million of the proceeds will be held in escrow for a period of one year, according to the Delray Beach, Fla.-based company. VeriChip said it intends to fund a special dividend to stockholders estimated to be at least $15 million. As of May 15, the company said it had approximately 11 million common shares outstanding.
At the closing of the Xmark transaction, Scott R. Silverman, CEO of VeriChip will no longer be CEO or chairman of the board at the company, although he will remain active as a consultant in the sale of the VeriMed Health Link business and the company, according to VeriChip.
The company reported that William J. Caragol will continue as president and chief financial officer and Joseph J. Grillo, president and CEO of Applied Digital Solutions, dba Digital Angel, will replace Silverman as its chairman.
The Xmark transaction is not subject to any financing conditions and is subject to approval by the company’s stockholders. VeriChip said its Digital Angel, its 48.2 percent stockholder, and Silverman, have formally agreed to vote in favor of the transaction.
Stanley Works, which makes tools and security products, said Xmark will help it provide a wider array of products and services and grow its security business.