DEERFIELD, Ill., June 6, 2018 /PRNewswire/ -- Essendant Inc.
(Nasdaq: ESND) today provided several updates in connection with
its proposed combination with the S.P. Richards business held by
Genuine Parts Company (NYSE: GPC) ("GPC").
As previously announced, Essendant and GPC entered into a
definitive merger agreement on April 12,
2018, in which Essendant agreed to combine with GPC's S.P.
Richards business in a Reverse Morris Trust transaction.
Bringing together leadership and operational expertise from
Essendant and S.P. Richards will create a company with greater
scale and an enhanced ability to serve customers in the evolving
business products marketplace. The combination is expected to
unlock more than $75 million in
annual run-rate cost synergies and more than $100 million in working capital
improvements.
The Essendant Board of Directors, with its financial and legal
advisors, evaluated GPC's previously announced proposal under which
Essendant shareholders would be provided a non-transferable right
to a contingent cash payment up to $4.00 per Essendant share following the merger
based on the subsequent trading price of Essendant shares (the
"CVR"). After thorough evaluation, including consideration of
the potential tax impact of the CVR and increases in the
termination fee and expense reimbursement cap that were tied to the
CVR, the Essendant Board of Directors determined that it was not in
the best interests of Essendant and its shareholders to agree to
the terms of the CVR as proposed by GPC at that time.
Essendant and GPC then determined that the two companies could not
reach agreement on the CVR and their merger agreement would not be
amended to reflect the CVR. The parties' merger agreement
remains in effect, and the Essendant Board of Directors has not
changed its recommendation that Essendant's shareholders vote in
favor of the transaction.
Essendant also announced it has received a request for
additional information (a "Second Request") from the Federal Trade
Commission ("FTC"). A Second Request was anticipated when
Essendant announced its initial expected timeline for the
transaction. The Second Request extends the waiting period
for the merger until 30 days after Essendant and GPC have
substantially complied with the request. Essendant and GPC
will continue to cooperate with the FTC as the transaction moves
into the next stage of the review process.
Separately, with regard to the previously disclosed unsolicited
proposal from Staples, Inc., Essendant provided Staples a revised
draft confidentiality agreement on May
17, 2018. As of today, Staples has not entered into a
confidentiality agreement with Essendant and has not otherwise
engaged in discussions with Essendant with respect to its proposal.
The stockholder rights plan Essendant adopted on May 17, 2018 remains in effect.
Cautionary Statement
This press release contains forward-looking statements,
including statements regarding the proposed business combination
transaction between Essendant Inc. ("Essendant") and Genuine Parts
Company ("GPC") in which GPC will separate its Business Products
Group and combine this business with Essendant. From time to time,
oral or written forward-looking statements may also be included in
other information released to the public. These forward-looking
statements are intended to provide management's current
expectations or plans for our future operating and financial
performance, based on assumptions currently believed to be valid.
Forward-looking statements often contain words such as "expects,"
"anticipates," "estimates," "intends," "plans," "believes,"
"seeks," "will," "is likely to," "scheduled," "positioned to,"
"continue," "forecast," "predicting," "projection," "potential" or
similar expressions. Forward-looking statements may include
references to goals, plans, strategies, objectives, projected costs
or savings, anticipated future performance, results, events or
transactions of Essendant or the combined company following the
proposed transaction with GPC, the anticipated benefits of the
proposed transaction with GPC, including estimated synergies, the
expected timing of completion of the transaction and other
statements that are not strictly historical in nature. These
forward-looking statements are based on management's current
expectations, forecasts and assumptions. This means they involve a
number of risks and uncertainties that could cause actual results
to differ materially from those expressed or implied here,
including but not limited to: the ability of Essendant and GPC to
receive the required regulatory approvals for the proposed
transaction and approval of Essendant's stockholders and to satisfy
the other conditions to the closing of the transaction with GPC on
a timely basis or at all; the occurrence of events that may give
rise to a right of one or both of Essendant and GPC to terminate
the merger agreement; negative effects of the announcement or the
consummation of the transaction with GPC on the market price of
Essendant's common stock and/or on its business, financial
condition, results of operations and financial performance; risks
relating to the value of the Essendant shares to be issued in the
transaction with GPC, significant transaction costs and/or unknown
liabilities; the possibility that the anticipated benefits from the
proposed transaction with GPC cannot be realized in full or at all
or may take longer to realize than expected; risks associated with
contracts containing consent and/or other provisions that may be
triggered by the proposed transaction with GPC; risks associated
with transaction-related litigation; the possibility that costs or
difficulties related to the integration of Essendant and GPC's S.P.
Richards business will be greater than expected; and the ability of
the combined company to retain and hire key personnel. There can be
no assurance that the proposed transaction with GPC or any other
transaction described above will in fact be consummated in the
manner described or at all. Stockholders, potential investors and
other readers are urged to consider these risks and uncertainties
in evaluating forward-looking statements and are cautioned not to
place undue reliance on the forward-looking statements. For
additional information on identifying factors that may cause actual
results to vary materially from those stated in forward-looking
statements, please see Essendant's and GPC's reports on Forms 10-K,
10-Q and 8-K filed with or furnished to the U.S. Securities and
Exchange Commission (the "SEC") and other written statements made
by Essendant and/or GPC from time to time. The forward-looking
information herein is given as of this date only, and neither
Essendant nor GPC undertakes any obligation to revise or update
it.
Additional Information
In connection with the proposed transaction with GPC, Essendant
will file with the SEC a registration statement on Form S-4
containing a proxy statement/prospectus of Essendant, and Rhino
SpinCo, Inc., a wholly-owned subsidiary of GPC created for the
proposed transaction ("SpinCo"), will file with the SEC a
registration statement on Form 10. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENTS, THE PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to
obtain the registration statements and the proxy
statement/prospectus free of charge from the SEC's website or from
Essendant or GPC. The documents filed by Essendant with the SEC may
be obtained free of charge at Essendant's website at
www.essendant.com, at the SEC's website at www.sec.gov or by
contacting Essendant's Investor Relations Department at (847)
627-2900. The documents filed by SpinCo with the SEC may be
obtained free of charge at GPC's website at www.genpt.com, at the
SEC's website at www.sec.gov or by contacting GPC's Investor
Relations Department at (678) 934-5000.
Participants in the Solicitation
Essendant, GPC and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction with GPC. Information about Essendant's
directors and executive officers is available in Essendant's proxy
statement for its 2018 annual meeting of stockholders, which was
filed with the SEC on April 13, 2018,
and its Current Report on Form 8-K, which was filed with the SEC on
May 25, 2018. Information about GPC's
directors and executive officers is available in GPC's proxy
statement for its 2018 annual meeting of shareholders, which was
filed with the SEC on February 27,
2018, and its Current Report on Form 8-K, which was filed
with the SEC on April 25, 2018. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the
registration statements, the proxy statement/prospectus and other
relevant documents to be filed with the SEC regarding the proposed
transaction with GPC.
No Offer or Solicitation
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
About Essendant
Essendant Inc. is a leading national distributor of workplace
items, with 2017 net sales of $5.0
billion. The company provides access to a broad assortment
of over 170,000 items, including janitorial and breakroom supplies,
technology products, traditional office products, industrial
supplies, cut sheet paper products, automotive products and office
furniture. Essendant serves a diverse group of customers, including
independent resellers, national resellers and e-commerce
businesses. The Company's network of distribution centers enables
the Company to ship most products overnight to more than ninety
percent of the U.S.
For Further Information, Contact:
investorrelations@essendant.com
(847) 627-2900
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SOURCE Essendant Inc.