An article yesterday incorrectly identified the president of Solon Automated Services Inc. Solon President M. Roy Cohen will remain as president after Solon is acquired by ARA Services Inc.
ARA Services Inc. will buy D.C.-based Solon Automated Services Inc., the nation's leading laundry-equipment supplier for apartment buildings, for about $100 million, Solon announced yesterday.
Under the agreement, ARA would pay Solon stockholders $25.25 a share--either in cash or as principal for a 10 percent note that will mature in January 1986. One-third of the note would be payable on the date of closing; the balance, in three equal installments in January 1984, 1985 and 1986.
The chief beneficiary of the acquisition is S. Solon Cohen, 69, the company's founder and chairman. Cohen has agreed to sell his holdings of 51 percent of the company's stock to ARA. Along with three other directors who are major stockholders, Cohen has given ARA irrevocable proxies for his shares.
The remaining stockholders still have to vote on the transaction in a special meeting in late August.
Under the merger agreement, Cohen would remain as president of Solon, which will operate as a subsidiary from Washington, where 100 of the company's 700 employes are based.
ARA is a $3-billion-a-year international service management company based in Philadelphia that provides food services, health care, magazine and book distribution, transportation and textile rental.
Solon installs and maintains coin-operated washers and dryers in apartment buildings, colleges, hospitals and military bases in 29 states. It also owns and operates Sugarbush Valley ski resort in Warren, Vt. In 1982, Solon's revenue totaled $97.6 million; profits were $7.57 million. The company had a five-year annual growth rate of 15 percent in sales and 16 percent in profits.
"The fit between Solon and ARA is an excellent one," said M. Roy Cohen, Solen Cohen's son and the company's president and chief executive officer. "Their business lines are very similar to what we do in Solon, and I think we will be more of a force to be reckoned with in the marketplace by reason of the combination." Roy Cohen noted that the company's chief competition in this area is Allegheny Beverage Corp., which has been expanding its laundry services division. "It's a natural fit," echoed ARA's executive vice president and chief financial officer, Frank Palamara. "We are very familiar with the kind of business that involves coin-operated machines, although we are not presently in the coin-operated laundry business."
Palamara and Cohen said that the corporate marriage will enable both companies to expand into new areas. For example, Palamara said ARA operates food services in hundreds of colleges across the country and maintains household appliances in condominiums in Arizona and Florida. Solon will be able to use ARA's contacts in these areas to expand its laundry-equipment services, he said.