Logistics and remanufacturing services provider ATC Technology Corp. (ATAC) Monday said it has entered into a definitive deal and plan of merger pursuant to which it will be acquired by privately-held Genco Distribution System, Inc., a provider of logistics services for retailers, manufacturers and US government agencies, in an all-cash merger valued at $512.6 million.
The merger consideration represents a 43.4% premium over ATC's July 16 closing price and a 46.5% premium over the average closing price of ATC common stock over the 30 trading days prior to July 19.
ATC Technology said Genco intends to finance the acquisition through the application of proceeds of about $125 million from the sale of Genco shares to affiliates of Greenbriar Equity Group LLC and from borrowings under a $450 million new line of credit to be extended to Genco by PNC Bank, National Association and Wells Fargo Bank, N.A. and through the application of cash on hand.
As per the merger agreement, Downers Grove, Illinois-based ATC Technology and its advisors are permitted and intend to actively solicit alternative acquisition proposals from third parties until August 17. ATC Technology added that there can be no assurance of any alternative proposal.
"The Board of ATC and Genco unanimously approved the agreement, which provides that in the merger each then outstanding share of ATC will be converted into the right to receive $25.00 per share in cash," ATC Technology stated.
The closing of the transaction, which is expected to occur during the fourth quarter of 2010, is subject to approval by holders of a majority of ATC's outstanding common stock, receipt by Genco of the proceeds of debt and equity financings, expiration of Hart-Scott-Rodino regulatory waiting period, and the satisfaction of other customary closing conditions.
With the completion of the acquisition, ATC will become a wholly owned subsidiary of Genco and will be fully integrated into Genco and will no longer trade publicly.
ATC Technology said Pittsburgh, Pennsylvania-based Genco has entered into a definitive stock purchase deal with affiliates of Greenbriar providing for the equity financing with Greenbriar.
Commenting on the news, ATC Technology President and Chief Executive Officer Todd Peters said, "After a thorough and extensive analysis, our Board of Directors unanimously concluded that this transaction provides outstanding cash value to our stockholders and is in the best interest of our stockholders, customers and employees."
Further, "Genco has also entered into a commitment letter with PNC and Wells Fargo providing for the debt financing. The commitment of PNC and Wells Fargo is not conditioned upon syndication of the line of credit facility with other financial institutions," ATC Technology added.
In Friday's regular trading session, ATAC closed trading on the Nasdaq at $17.43 per share on a volume of 2,000 shares. In the past 52-week period, the stock traded in a range of $14.95 to $24.98.
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