Brooke Credit Corporation to Merge with Oakmont Acquisition Corp.
February 08 2007 - 9:35AM
PR Newswire (US)
Brooke Corporation to Remain Largest Shareholder OVERLAND PARK,
Kan., Feb. 8 /PRNewswire-FirstCall/ -- Brooke Corporation
(NASDAQ:BXXX) announced today that it has entered into a definitive
agreement by which Brooke Credit Corporation, its finance company
subsidiary, will merge with Oakmont Acquisition Corp. (OTC:OMAC)
(BULLETIN BOARD: OMAC) ("Oakmont"). The planned merger will result
in Brooke Credit becoming a public company with Brooke Corporation
as its largest shareholder. Oakmont is a blank check or special
purpose acquisition company (SPAC) formed for the purpose of
investing in an operating business to build long- term shareholder
value. Oakmont was founded by Robert J. Skandalaris and Michael
Azar, two executives with significant public company experience. At
Sept. 30, 2006, Oakmont had approximately $48.6 million in cash
available for effecting a business combination. Additional
information about Oakmont can be found at http://www.sec.gov/.
Under the terms of the agreement, Brooke Credit will merge with and
into Oakmont, with the surviving company operating under the name
of Brooke Credit Corporation. At closing, Brooke Corporation and
warrant holders will receive merger consideration of approximately
17.5 million shares of Oakmont common stock with a current value of
approximately $105.0 million. Brooke Corporation and warrant
holders will receive an additional 4.0 million shares of Oakmont
common stock should Brooke Credit achieve adjusted earnings (as
defined in the definitive Agreement and Plan of Merger) of $15.0
million in 2007, and an additional 1.0 million shares should Brooke
Credit achieve adjusted earnings of $19.0 million based on the same
computation in 2008. The contingent consideration has a current
value of approximately $30.0 million. Immediately prior to the
merger, Oakmont will effect a reincorporation merger in order to
become a Kansas corporation. At the closing of the transaction,
Brooke Corporation will own approximately 58.2 percent of the
outstanding shares of common stock of Oakmont. Giving effect to the
increased shares in the event the financial goals are achieved
during 2007 and 2008, Brooke Corporation would own approximately
63.6 percent of the outstanding shares of common stock of Oakmont.
These percentages of Brooke Corporation's ownership of Oakmont
common stock do not reflect the effect of any exercise of any
outstanding Oakmont warrants; however, do reflect the effect of
outstanding Brooke Credit warrants. If all of Oakmont outstanding
warrants are exercised, then Brooke Credit would receive up to
approximately $85.8 million in additional equity, and Brooke
Corporation's ownership interest would decrease to approximately
41.8 percent of Oakmont's outstanding shares, assuming the 2007 and
2008 financials goals are achieved, and approximately 36.1 percent
of outstanding shares if the financial goals are not achieved. The
available cash of Oakmont is expected to be used for working
capital, possible finance company acquisitions and to grow Brooke
Credit's loan portfolio. Robert D. Orr, chairman and chief
executive officer of Brooke Corporation, stated, "Brooke
Corporation's core business is franchising of independent insurance
agencies. Our franchising activities have spawned two additional
and separate business units, one of which is Brooke Credit
Corporation, which specializes in lending to insurance-related
businesses. The capital requirements of Brooke Credit Corporation
have grown as its loan portfolio balances have grown. As a public
company, Brooke Credit Corporation is better positioned to access
the capital markets. As such, we believe that sharing ownership in
Brooke Credit Corporation will ultimately result in more value for
Brooke Corporation shareholders." Michael Lowry, chief executive
officer of Brooke Credit Corporation, stated, "We are excited about
the opportunities that this new relationship with Oakmont will
bring to Brooke Credit's business. During 2006, Brooke Credit
achieved a significant milestone by growing its loan portfolio to
$483.3 million, representing an annualized growth rate during 2006
of approximately 74 percent. We believe that the merger with
Oakmont and resulting increase in equity will help Brooke Credit
continue its growth and success." Robert J. Skandalaris, chairman
and chief executive officer of Oakmont, stated, "We are very
excited about this opportunity. Through our relationships within
the financial and investment banking industry, we were presented
with this transaction, which we determined was a tremendous
opportunity for our shareholders. The management team at Brooke
Credit is exceptional and they have, in a very short period of
time, created the industry leader in specialty finance. We look
forward to a very productive future with this management team."
About Brooke Corporation ... Brooke Corporation is listed on the
Nasdaq Global Market under the symbol "BXXX". Its wholly owned
subsidiary, Brooke Franchise Corporation, distributes insurance and
banking services through a network of more than 700 franchise
locations. Brooke Franchise was named the 22nd largest U.S.
insurance agency by Business Insurance magazine (2006) and the
country's No. 37 top franchise opportunity by Entrepreneur magazine
(2007). For more information, visit http://www.brookeagent.com/ .
About Brooke Credit Corporation ... Brooke Credit Corporation is a
subsidiary of Brooke Corporation (NASDAQ:BXXX) that originates
loans to insurance agencies and related businesses. Brooke Credit's
loan portfolio balances totaled approximately $483.3 million on
Dec. 31, 2006. Loans have been mostly sold as individual loans to
participating lenders or as pooled loans to investors through
asset-backed securitizations. The transaction has been approved by
the boards of Brooke Credit, Brooke Corporation and Oakmont, but is
subject to customary closing conditions including the approval of
Oakmont's stockholders. In addition, the closing is conditioned on
the holders of fewer than 20% of the shares of common stock of
Oakmont issued in its initial public offering voting against the
transaction and electing to convert those shares into cash, as
permitted by Oakmont's certificate of incorporation. The
transaction is anticipated to close during the second quarter of
2007. The matters discussed in this news release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Certain forward-looking
statements can be identified by the use of forward-looking
terminology, such as 'believes', 'expects', 'may', 'will', 'could',
'should', 'seeks', 'approximately', 'intends', 'plans',
'estimates', or 'anticipates', or the negative thereof or another
comparable terminology, or by discussions of strategy, plans or
intentions. In particular, any statements, express or implied,
concerning future operating results or ability to generate
revenues, income or cash flow to service debt are forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those projected. These include the risks associated with the
successful consummation of the merger contemplated hereby. In light
of these and other uncertainties, the inclusion of forward-looking
statements in this news release should not be regarded as a
representation by Brooke Credit or Brooke Corporation. that Brooke
Credit's plans and objectives will be achieved. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Brooke Credit
assumes no obligation to update information contained in this news
release. ADDITIONAL INFORMATION Stockholders of Oakmont are urged
to read the Registration Statement on Form S-4, which includes a
prospectus and the Oakmont proxy statement, when it becomes
available as it will contain important information regarding Brooke
Credit and the transaction. Copies of the registration statement
will be available when filed and without charge at the U.S.
Securities and Exchange Commission's Internet site
(http://www.sec.gov/). Oakmont and Brooke Credit and their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of the
proposed merger with Brooke Credit. Information regarding Oakmont's
directors and executive officers is available in its Form 10-K for
the year ended December 31, 2005, filed with the U.S. Securities
and Exchange Commission. 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 proxy statement to be filed by Oakmont
with the U.S. Securities and Exchange Commission when it becomes
available. DATASOURCE: Brooke Corporation CONTACT: Anita Larson of
Brooke Corporation, , or +1-913-661-0123 Web site:
http://www.brookecorp.com/ http://www.brookeagent.com/
Copyright
Brooke Corp (MM) (NASDAQ:BXXX)
Historical Stock Chart
From Jul 2024 to Aug 2024
Brooke Corp (MM) (NASDAQ:BXXX)
Historical Stock Chart
From Aug 2023 to Aug 2024