Epicor Software Corp. (EPIC) on Monday said it has agreed to acquire NSB Retail Systems Plc (NSB.L) for 160 million or about US$322 million in cash. The company expects the deal to become effective during February 2008, subject to certain closing conditions.
As per the deal, which was approved by the boards of both the companies, NSB shareholders will receive 38 pence per NSB ordinary share.
Epicor expects the transaction to be materially accretive to its non-GAAP earnings for the 12-month period following the completion of the deal and dilutive to GAAP earnings for a period of time following the close of the transaction.
David Henning, NSB's current Chief Executive Officer, is expected to remain with the combined company in an executive management role heading Epicor's expanded retail business.
Epicor has received undertakings to vote in favor of the scheme at the Court Meeting to approve the scheme from certain NSB Shareholders, including all NSB Directors who hold NSB Shares, representing about 31.2% of the existing issued ordinary share capital of NSB entitled to vote at the Court Meeting and about 36.9% of the existing issued share capital of NSB entitled to vote at the NSB General Meeting.
NSB has scheduled its general meeting on or around January 16, 2008 for the shareholders to vote for the deal.
In addition, Epicor said it has replaced its credit facility with a new senior secured credit facility arranged by Banc of America Securities LLC as Sole Lead Arranger and Book Manager and with Bank of America N.A. as Administrative Agent, and KeyBank National Association as Syndication Agent.
The new credit facility provides Epicor with a secured revolving loan facility in an amount up to $100 million and a secured term loan facility in an amount up to $100 million.
Epicor has currently planned to fund the transaction with about $155 million in existing cash balances, with the balance of the consideration funded by drawing from its credit facility.
In this transaction, USB Investment Bank is acting as financial advisor to Epicor, while Close Brothers Corporate Finance is acting as financial advisor to NSB.
EPIC is currently trading at $11.39, up 23 cents or 1.98%, while NSB.L is currently trading at 37.34 pence, up 3.34 pence or 9.82%.
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