VeriChip (CHIP) Completes Sale of Xmark to Stanley for $47.9M in Cash

July 18, 2008 10:12 AM EDT

VeriChip Corporation (NASDAQ: CHIP) today announced it has completed the sale of its wholly-owned Canadian subsidiary, Xmark Corporation, to Stanley Canada Corporation, a wholly-owned subsidiary of The Stanley Works for $47.9 million in cash. The consideration consists of a $45 million purchase price plus a balance sheet adjustment of $2.9 million.

Under the terms of the agreement, VeriChip will use the proceeds of the sale of Xmark to retire all of the Company's outstanding debt. The Company expects to realize net proceeds, after retiring its outstanding debt, paying transaction related costs, and other contractual commitments, of approximately $24.8 million.
According to the agreement, $4.5 million of the proceeds will be held in escrow for a period of 12 months. The Company intends to fund a special dividend to stockholders currently estimated to be at least $15 million.

VeriChip Corporation develops, markets, and sells radio frequency identification systems (RFID) to identify, locate, and protect people and assets in the healthcare market in the United States, Canada, and internationally.

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