Comments on R&R being purchased by UCS?

[aksales]

Good Morning all. I am just curious on what everyone thinks of Reynolds being purchased by UCS. Matt... what are you thoughts on this?

------------------
Jason Wilhelm
IT Support Specialist
Alaska Sales and Service
www.aksales.com

[Matt Parsons]

Well this is certainly interesting news. Here is what we think we know at the moment. R+R states on their website that this is a merger. This seems to differ from what the WSJ, Reuters, and other financial news media are reporting, which is that UCS has acquired R+R. The name moving forward (assuming it is approved by the R+R Board and Stock Holders) will be R+R which only makes sense since they have a much better 'name' in the market place than UCS from a client perspective.

My big question is what will the management team look like in the future. Bob Brockman, the owner of UCS has been the driver of UCS since....forever. I can't imagine he will step down and have no role in this new company.

Merrill Lynch reported that the company will be taken private, a great deal of work will be done to improve the balance sheet and the financial aspect of the company (that is probably why R+R had recently announced a series of layoffs to reduce fixed overhead costs), and that the company will most likely be resold in the next 24-36 months once it is on better financial shape.

Lots more to come on this, but for the near term future I have to believe that this is a major effort to try and weld these two companies together and their corporate cultures. I know how difficult this can be having personally participaed in it within the past 2.5 years.

A recent article I read said more than 50% of the 'mergers' fail due to differences in the corporate culture. It is my opinion that these two companies cultures are VERY different.

[This message has been edited by Matt Parsons (edited 08-10-2006).]

[scotstrong]

Matt:

According to two different R&R employees, they were advised by their upper management that Bob Brockman is retiring.

Scot Strong

[jazdale]

Why would you retire if you just put up 50.1% interest in a company?

[scotstrong]

Just an example of the mis-information that flies through the rumor mill in these situations. One of these same employees who told me this is now saying that he has heard three different versions of what is coming from his own upper mgmt. We may not know for sure til after shareholder meeting what will really happen.

Scot Strong

[Herb]

If any of you think Brockman will retire, then you must be drinking the Kool-Aid. What is he, in his mid-fifties? The man has his fingers in every part of UCS and all those Key Machine companies, not to mention a European DCS company. You never give up your baby and UCS is his baby.

[Matt Parsons]

Herb, I can't agree with you more. I think he is actually older than you think but he has been the driving force behind every action at UCS for...ever! I can't imagine he will be stepping aside and allowing others to drive the destiny of this entity.

Time will tell how this all pans out but I am a big believer at looking at history to determine the future, and if you agree, just look at what happened when UCS acquired (or maybe the new word for this is now merged) the Ford CDS (DMS) offering. How many Ford dealers today stayed with UCS and their offering? How many were with Ford at the time of the purchase? Any Ford dealers wish to comment?