Intermark to Buy Into Triton Group

LA JOLLA — Intermark Inc. on Monday said it would pay $34 million for a 39% interest in Triton Group Ltd., a Los Angeles-based diversified company with operations in the automotive, aviation and apparel markets.

Intermark will immediately purchase 19% of Triton’s common stock from Fuqua Industries, an Atlanta-based diversified consumer products and service company. In addition, Intermark will receive Fuqua’s rights to buy an additional 20% of Triton’s stock, according to Mitchell R. Woodbury, Intermark’s vice president and corporate counsel.

The transaction is “remarkably similar” to Intermark’s 1983 purchase of Pier 1 from Fuqua, according to Intermark President Charles (Red) Scott.

The purchase, Scott said, is a “friendly acquisition,” and gives Intermark “exciting participation in a number of growing, profitable and cash-generating businesses.”

Intermark bought Pier 1 and several of its companies for $47 million. That investment now is worth about $124 million, Scott said.

The deal is expected to be completed next month, when four Intermark “representatives” will become members of Triton’s eight-member board.

The directors will include Scott, Intermark directors Thomas Warner and Robert Elliot, and John Stiska, special counsel to Intermark’s board.

The market reacted favorably to the deal--Intermark’s stock hit a new high of 18 1/8.

Analysts anticipate that the Fuqua deal may be as profitable as Intermark’s Pier 1 acquisition, according to Irving Katz, director of research at San Diego Securities.

Intermark will pay cash for the purchase, using its current $9 million in cash on hand and, perhaps, tapping a $50-million line of bank credit that has yet to be used, Woodbury said.

Intermark plans to increase its holdings in Triton, Woodbury added.

“Our goal is to own 50% of the public companies we’re involved with,” he said.

Triton revenue for the year ended Jan. 31 is expected to top $300 million, with earnings of about $12 million.

Triton owns National Airmotive, a franchised distributor and overhaul agency for the Allison family of aviation, industrial and marine gas turbine engines; Continental Graphics, a provider of computer-assembled illustrated parts catalogues for the commercial aircraft industry, and Simplicity Pattern Co., the world’s largest manufacturer of patterns for the home sewing market.