Godspeed Capital Proposes to Acquire Hill International For $143.9 Million in Cash
July 19 2022 - 7:00AM
Business Wire
$1.85 Per Share All-Cash Offer Represents 11.4%
Premium Over 30-Day Average Closing Price
Godspeed Capital Management LP (“Godspeed Capital”), a lower
middle-market Defense & Government services, solutions, and
technology focused private equity firm, today sent the following
letter to the Board of Directors of Hill International, Inc.
(NYSE:HIL), proposing to acquire the company for $1.85 per share in
cash.
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the full release here:
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The full text of the letter sent to Hill International is as
follows:
Members of the Board of Directors:
On behalf of Godspeed Capital Management LP (“Godspeed”) and our
strategic platform, Huckabee Architects LP (“Huckabee”), led by
Chris Huckabee, we are writing to submit an offer to acquire 100%
of Hill International, Inc.’s (“Hill” or the “Company”) issued and
outstanding shares of common stock and equivalents for a price of
$1.85 per share in cash.
We believe this is a highly compelling price and represents a
premium of 11.4% over the stock’s thirty day trailing
average closing price on July 18th, 2022. Notably, our offer
price represents a premium of 56.78% over the 52-week low
achieved on May 10th, 2022, less than three months ago, at which
time we began accumulating our 3.75% ownership position
(corresponding to 42.39% of the share volume over that period).
Our belief is that the best path to maximize shareholder value
would be for the Company to entertain a transaction in which our
portfolio company, Huckabee, acquires Hill at the proposed premium
to the current share price.
As a micro-cap public equity, Hill has for several years
underperformed on its earnings commitments and consistently
struggles with liquidity. With sub-scale average annual EBITDA,
industry low sub-6% EBITDA margins, and negligible free cash flow
generation the excessive costs of being a public company are
wasteful and these millions would be better spent on innovation and
growth. The resulting underperformance in Hill’s equity valuation
was recently summarized in the attached news article
(https://finance.yahoo.com/news/hill-international-nyse-hil-investors-141708657.html).
We are of the belief that a strategic course correction executed
in a private environment is the best path forward for Hill’s
shareholders, employees, and customers.
For background, Godspeed is a private investment firm with
extensive experience investing in Engineering, Architecture, and
Government related businesses. We own a controlling interest in
Huckabee, a leading architecture, engineering, and consulting
services and solutions provider. As such, we have excellent insight
into both the opportunities and risks associated with Hill.
We believe that Hill possesses a Culture of Excellence that is
exemplified by its wonderful employees and distinguished work, all
of which contributes to the Hill’s premier reputation. We firmly
believe that Godspeed and Huckabee are the best partner to liberate
management from the constraints of short-sighted public company
performance expectations to drive a new era of growth and success
for Hill while protecting and investing in the employees, culture,
customer experience, and legacy. We are well positioned to grow the
Company in tandem with Hill management and believe that the
combination with Huckabee is a strong cultural and strategic
fit.
We have held in depth discussions with our investment bank and
would expect to have a fully executed, underwritten financing
commitment prior to execution of the definitive merger agreement.
The definitive merger agreement would not include a financing or
due diligence condition.
We look forward to beginning discussions immediately and are
willing to execute a confidentiality agreement. At this time, we
are interested in a consensual transaction in which the parties
enter into a short exclusivity period during which time we can
finalize our confirmatory due diligence and negotiate the
definitive agreements.
We believe our proposal is both compelling and in the best
interest of your shareholders, employees, and customers. I am
available to discuss this offer at your convenience and may be
contacted at 202-765-1010. In advance, thank you for your
consideration.
Sincerely,
Douglas T. Lake Jr. Managing Partner, Godspeed Capital
Management LP Chairman, Huckabee Architects LP
About Godspeed Capital
Godspeed Capital is a lower middle-market Defense & Government
services, solutions, and technology focused private equity firm
investing alongside forward-thinking management teams that seek an
experienced and innovative investment partner with unique sector
expertise, operational insight, and flexible capital for growth.
For more information, please visit the Godspeed Capital website at
www.godspeedcm.com.
About Huckabee Architects
Huckabee Architects is the platform brand of Godspeed Capital’s
architecture, engineering, and consulting services and solutions
growth strategy focused on providing cutting edge,
technology-driven education design and engineering solutions in
attractive, high-growth U.S. markets. Founded in 1967 and
headquartered in Fort Worth, Texas, Huckabee is the largest
education architecture and design services firm in the state of
Texas and consistently ranks among the top educational architecture
firms in the nation. To learn more, please visit
www.huckabee-inc.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220719005526/en/
Media: Alex Jeffrey/Sara
Widmann Gasthalter & Co. (212) 257-4170
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