Apax Partners has agreed to acquire Quality Distribution Inc. for approximately $800 million (£525.98 million; €709.91 million) or $16 per share in cash, including debt financing, an Apax spokesperson confirmed to Private Equity International.
The deal has been unanimously approved by the board of directors at the Tampa, Fla.,-based company, which provides logistics and transportation in North America.
“As the leading logistics platform in the bulk chemical transportation industry, Quality is well positioned to take advantage of both organic growth opportunities and strategic acquisitions,” Ashish Karandikar, a partner on Apax's services team, said in a statement.
Debt financing for the deal will be provided by Deutsche Bank AG, Bank of America, Jefferies Finance LLC, MIHI LLC and SunTrust Bank. The Apax spokesperson declined to comment on the amount of debt involved in the transaction.
The acquisition deal is worth a premium of about 63 percent over Quality Distribution's closing share price on 6 May and is expected to be completed in the third quarter this year. The company can consider acquisition proposals from other companies during a 40-day “go-shop” period that starts once the agreement is reached.
Through this deal, Apax will help Quality Distribution's growth strategy in its chemical and intermodal businesses.
“They will bring financial resources and expertise that will assist us as we expand Quality Distribution through internal investment and initiatives as well as disciplined acquisitions,” said Gary Enzor, chairman and chief executive officer of Quality Distribution.
RBC Capital Markets provided financial advising to Quality Distribution for this agreement. Fried, Frank, Harris, Shriver & Jacobson was the legal counsel to Quality Distribution and Skadden Arps, Slate, Meagher & Flom partners Ann Beth Stebbins, Don Frost, Jr., Erica Schohn, Victor Hollender, and David Schwartz, along with Kirkland & Ellis partners Jay Ptashek and Judson Oswald counseled Apax.
On the same day this agreement was announced, Quality Distribution released its first quarter earnings. It earned $0.09 per diluted share, compared with $0.11 a year ago, missing the Wall Street Journal analysts' estimate of $0.14.
Quality Distribution's shares were up 60.62 percent at $15.74 per share at 11:47 ET today, giving the company a market capitalisation of $274.98 million.