Private equity firm Perseus has agreed a sale of promotional stationary maker Workflow Management to a blank cheque company for $669 million (€458 million).
Florida-based Enterprise Acquisition Corporation, incorporated last year, will assume $490 million in existing Workflow debt, with the remainder of the transaction price financed through the reverse merger of $179 million in Enterprise common stock. Enterprise plans to list Workflow on the NASDAQ stock exchange under the company’s former ticker symbol, WORK.
Enterprise, listed like many other special purpose acquisition companies on the American Stock Exchange, could pay as much as $743 million if a management incentive program linked to Workflow’s future publicly-traded market price is triggered. At that aggregate purchase price, Enterprise will be paying 8.8 times EBITDA, according to an Enterprise shareholder presentation.
At least 70 percent of Enterprise shareholders must approve the deal, which is expected to complete by the fourth quarter of 2009 or first quarter of 2009. Perseus and Workflow co-owner The Renaissance Group, a private investment firm, will retain a roughly 46 percent stake in the company.
Workflow has signed an agreement to acquire two additional businesses in the marketing services and promotion products industry in conjunction with the merger. Details of those add-on acquisitions were not disclosed.
Dayton, Ohio-based Workflow provides managed printed and promotional products to a wide variety of businesses throughout North America, including Las Vegas hotel giant MGM Mirage, toy retailer Toys “R” Us, and camera and film maker Kodak.
The company, founded in 1927, employs roughly 3,300 and services 24,000 clients. Including revenue from the two pending undisclosed acquisitions, the firm generated $1.2 billion in pro forma operating revenues last year.
Washington DC-based Perseus partnered with Renaissance to delist the then Florida-based Workflow in 2004 for $225 million, amid considerable shareholder acrimony. After installing Renaissance founder Greg Mosher as chief executive, Perseus steered Workflow through two major divestments before acquiring billing and document outsource service provider The Relizon Company from The Carlyle Group in 2005. Terms of that deal were not disclosed.
Mosher will stay on as chief executive of Workflow if the deal is approved, and will be joined on the board of directors by two members nominated by Perseus, as well as Enterprise directors Daniel Staton and Marc Bell.
Staton is a partner in Bell’s entertainment and publishing-focused private investment house, Marc Bell Capital Partners. The Florida-based firm, which possesses both a private equity and real estate division, sponsored the launch of Enterprise in July of last year, raising $225 million in the firm’s initial public offering.