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VeriChip Corporation, a company that provides radio frequency identification systems for healthcare and patient-related needs, announced today that it’s entered a $45 million stock purchase agreement with The Stanley Works for the sale of its wholly-owned Canadian subsidiary, Xmark Corporation.

 

VeriChip has reportedly retained the investment banking firm of Kaufman Bros., L.P., to help with the sale of VeriMed Health Link business. Kaufman will also assist in the event of sale of the entire company, after the sale of Xmark. VeriChip intends to propose a second, special dividend to its stockholders that will consist of all of the remaining distributable cash then held following any sale of the VeriMed Health Link business and the release of the escrowed funds.

 

According to the terms of the stock purchase agreement, $4.5 million of the proceeds will be held in escrow for one year. VeriChip plans to retire all of its outstanding debt, following the completion of the sale of Xmark to Stanley. After retiring its outstanding debt, paying transaction related costs, and other contractual commitments, the company expects to realize net proceeds of approximately $21.4 million. VeriChip said it intends to fund a special dividend to stockholders estimated to be at least $15 million. VeriChip reportedly had approximately 11.0 million common shares outstanding as of yesterday.

 

While the Xmark transaction is subject to approval by VeriChip’s stockholders, it’s not subject to any financing conditions. The Company’s 48.2 percent stockholder, Digital Angel, along with Scott R. Silverman, chief executive officer, have formally agreed to vote in favor of the transaction.

 

Silverman will no longer be an officer or director of VeriChip after the closure of the Xmark transaction. But he will remain active as a consultant in the sale of the VeriMed Health Link business and the Company. William J. Caragol will continue as president and chief financial officer of VeriChip. Mr. Silverman will be replaced by Joseph J. Grillo, President and Chief Executive Officer of Applied Digital Solutions (News - Alert), Inc. d/b/a Digital Angel as a Board Member of the Company, as its Chairman.