Government Service Provider Tri-S Security to Acquire Paragon Systems

Tri-S Security, formerly a provider of security services for government entities, announced that it has sold its sole operating subsidiary, Paragon Systems, to Pinkerton Government Services, a wholly-owned subsidiary of Securitas AB. Paragon provides contract guard services to various Federal government agencies throughout the U.S. and maintains its principal office in Washington, D.C.

Pinkerton purchased all of the outstanding shares of Paragon capital stock for a purchase price of approximately US$34.5 million, subject to post-closing adjustments based upon Paragon's annualized revenue and net equity as of the closing date. Approximately $4.9 million of the purchase price will be held in escrow to satisfy such purchase price adjustments and otherwise to secure Tri-S's indemnification obligations under the purchase agreement. Subject to such adjustments and the satisfaction or resolution of indemnification claims made against the escrow, escrow funds will be released beginning one year after the closing. Tri-S may receive certain additional consideration in respect of post closing events.

All of the closing proceeds from the sale of Paragon were used to repay a significant portion of Tri-S's secured debt, pay transaction and related expenses and provide for working capital. If Tri-S receives any additional amounts from the release of escrow funds or as a result of post-closing events, such amounts will be used to repay its remaining secured and unsecured debt and other liabilities and, if amounts remain thereafter, to make a distribution to shareholders.

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