WTG merger aimed at meeting its desire to go public swiftly Baltimore company joining Mo. business

June 18, 1993|By Michael Dresser | Michael Dresser,Staff Writer

World Technology Group Inc., a Baltimore-based distributor of hardware and industrial supplies, is going public in a roundabout sort of way.

In a complicated deal announced yesterday, the parent of Baltimore's Albert Gunther Co. will merge with National Industrial Security Corp. (NISCO), a publicly traded security guard company based in St. Louis.

If the transaction, which is subject to approval by shareholders, is completed, NISCO will technically be the surviving corporation, but the company will immediately change its name to World Technology Group (WTG) and establish its headquarters in Baltimore, said NISCO Chief Executive Max T. Jackson.

The company's stock would continue to trade in the over-the-counter market through the NASD Bulletin Board Quotation System under the World Technology Group name.

A NISCO statement said the company expected the merger to be completed next month. WTG President David Stevens said (( he expected no problems in securing approval from the Securities and Exchange Commission for the transferred listing.

Mr. Jackson said the deal's purpose is allow WTG to become a public company more quickly and at less cost than in a conventional initial public offering. By gaining access to the public equity markets quickly, WTG will be able to expedite its ambitious expansion plans, he said.

NISCO's security guard business would become a separate, private company and be transferred to Mr. Jackson in exchange for 2 million shares of NISCO stock. Essentially, the only asset WTG would acquire is NISCO's public listing, Mr. Jackson said.

After the merger, Mr. Stevens would become chief executive of the public company. Mr. Jackson would become a director of the new WTG and continue to run the separate guard business, he said. WTG's holders would own 80 percent of the combined companies' stock and probably would finance expansion through a secondary offering, Mr. Jackson said. NISCO's holders would receive 20 percent of the stock.

NISCO's stock, a thinly traded small-capitalization issue, was trading in a range from 18 to 37.5 cents a share after the announcement yesterday, Mr. Jackson said.

NISCO posted 1992 revenues of $2.5 million while WTG reported $11.9 million.

Founded last year, WTG has grown swiftly through acquisitions.

WTG acquired the rights to the Albert Gunther name and old Gunther building in Mount Vernon after the longtime industrial hardware and contractor supplier went bankrupt.

Since that purchase, WTG has opened Albert Gunther stores in Salisbury, Washington, and Richmond and Fredericksburg, Va., as well as a second Baltimore store near Caton Avenue and the Beltway.

Last November, WTG also acquired J.B. Kendall Co., an operator of hardware and steel supply stores in the Washington area, and Eastern Shore Steel Co., a distributor of steel products in Maryland, Delaware and Virginia.

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