QINGDAO, China and ROCKVILLE, Md., Nov.
17, 2016 /PRNewswire/ -- Synutra International, Inc.
(Nasdaq: SYUT), ("Synutra" or the "Company"), which owns
subsidiaries in China that
produce, distribute and sell nutritional products for infants,
children and adults, today announced it has entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Beams
Power Investment Limited, a company with limited liability
incorporated under the laws of the British Virgin Islands ("Parent"), and Beams
Power Merger Sub Limited, a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub
will merge with and into the Company, with the Company continuing
as the surviving corporation and a wholly-owned subsidiary of
Parent (the "Merger"). Parent currently beneficially owns
approximately 63.5% of the Company's outstanding shares of common
stock, $0.0001 par value per share
(the "Company Common Stock"). Ms. Xiuqing
Meng, spouse of Mr. Liang
Zhang, is the sole shareholder of Parent. Mr. Liang Zhang is the chairman and chief executive
officer of the Company.
Pursuant to the terms of the Merger Agreement, at the effective
time of the Merger, each share of Company Common Stock issued and
outstanding immediately prior to such effective time (other than
(i) the shares held by (a) Parent, Merger Sub and any other direct
or indirect subsidiary of Parent and (b) the Company and (ii) the
shares in respect of which appraisal rights have been properly and
validly exercised under Delaware
law) will be automatically canceled and converted into the right to
receive $6.05 in cash (the "Merger
Consideration"), without interest. The Merger Consideration
represents a 58% premium over the closing price of the Company
Common Stock as quoted by NASDAQ Global Select Market (the
"NASDAQ") on January 14, 2016, and a
premium of 31% and 20%, respectively, over the Company's 30- and
60-trading day volume-weighted average price as quoted by the
NASDAQ prior to January 14, 2016, the
last trading day prior to the Company's announcement on
January 15, 2016 that it had received
a non-binding "going private" proposal.
Parent has secured a committed loan facility from Shanghai
Pudong Development Bank Co., Ltd. to finance the transactions
contemplated by the Merger Agreement, including the Merger.
The Company's board of directors, acting upon the unanimous
recommendation of the special committee formed by the board of
directors (the "Special Committee"), unanimously approved the
Merger Agreement and the transactions contemplated by the Merger
Agreement, including the Merger, and resolved to recommend that the
Company's stockholders adopt the Merger Agreement and the
transactions contemplated by the Merger Agreement, including the
Merger. The Special Committee, which is composed solely of
independent directors of the Company who are unaffiliated with
Parent, Merger Sub or management of the Company, exclusively
negotiated the terms of the Merger Agreement with the buyer group
consisting of Mr. Liang Zhang, Ms.
Xiuqing Meng, Parent and Merger Sub,
with the assistance of its independent financial and legal
advisors.
The Merger is subject to stockholder approval as well as certain
other customary closing conditions. Pursuant to the Merger
Agreement, adoption of the Merger Agreement by the Company's
stockholders requires the affirmative vote of (i) the holders of at
least a majority of the Company Common Stock and (ii) the holders
of at least a majority of the Company Common Stock other than the
shares of Company Common Stock held by (a) Parent, Merger Sub and
any other direct or indirect subsidiary of Parent and (b) the
Company. The Company will call a meeting of stockholders for the
purpose of voting on the adoption of the Merger Agreement as soon
as practicable. If completed, the Merger will, under laws of the
State of Delaware, result in the
Company becoming a privately-held company and the Company Common
Stock would no longer be listed on the NASDAQ.
Houlihan Lokey Capital, Inc. is serving as the financial advisor
to the Special Committee, Cleary Gottlieb
Steen & Hamilton LLP is serving as U.S. legal counsel to
the Special Committee, and Potter Anderson & Corroon LLP is
serving as Delaware legal counsel
to the Special Committee. Wilson Sonsini
Goodrich & Rosati is serving as U.S. and Delaware legal counsel to the Company.
Davis Polk & Wardwell LLP is
serving as U.S. legal counsel to the buyer group.
Additional Information about the Transactions
The Company will file with the Securities and Exchange
Commission (the "SEC") a report on Form 8-K regarding the proposed
transactions described in this announcement, which will include as
an exhibit thereto the Merger Agreement. All parties desiring
details regarding the transactions contemplated by the Merger
Agreement, including the Merger, are urged to review these
documents, which will be available at the SEC's website
(http://www.sec.gov).
In connection with the special meeting of the stockholders of
the Company to be held to approve the Merger, the Company will
prepare and mail a proxy statement to its stockholders. In
addition, certain participants in the Merger will prepare and mail
to the Company's stockholders a Schedule 13E-3 transaction
statement. These documents will be filed with or furnished to the
SEC. INVESTORS AND STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN
THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR
FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT AND RELATED MATTERS. In
addition to receiving the proxy statement and Schedule 13E-3
transaction statement by mail, stockholders also will be able to
obtain these documents, as well as other filings containing
information about the Company, the Merger and related matters,
without charge, from the SEC's website (http://www.sec.gov) or at
the SEC's public reference room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549.
The Company and certain of its directors, executive officers and
other members of management and employees may, under SEC rules, be
deemed to be "participants" in the solicitation of proxies from the
Company's stockholders with respect to the Merger. Information
regarding the persons who may be considered "participants" in the
solicitation of proxies will be set forth in the proxy statement
and Schedule 13E-3 transaction statement relating to the Merger
when it is filed with the SEC. Information regarding certain of
these persons and their beneficial ownership of the Company Common
Stock as of June 13, 2016 is also set
forth in the Company's Form 10-K, which was filed with the SEC on
June 13, 2016. Additional information
regarding the interests of such potential participants will be
included in the proxy statement and Schedule 13E-3 transaction
statement and the other relevant documents filed with the SEC when
they become available.
This announcement is neither a solicitation of proxy, an offer
to purchase nor a solicitation of an offer to sell any securities
and it is not a substitute for any proxy statement or other filings
that may be made with the SEC should the Merger proceed.
About Synutra International, Inc.
Synutra International, Inc. (Nasdaq: SYUT) is a leading infant
formula company in China. It
principally produces, markets and sells its products through its
operating subsidiaries under the "Shengyuan" or "Synutra" name,
together with other complementary brands. It focuses on selling
premium infant formula products, which are supplemented by more
affordable infant formulas targeting the mass market as well as
other nutritional products and ingredients. It sells its products
through an extensive nationwide sales and distribution network
covering all provinces and provincial-level municipalities in
mainland China. As of September 30, 2016, this network comprised over
960 independent distributors and over 280 independent
sub-distributors who sell Synutra products in approximately 26,900
retail outlets.
Forward-looking Statements
This press release contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 that are based on our current expectations, assumptions,
estimates and projections about Synutra. All statements other than
statements of historical fact in this release are forward-looking
statements. In some cases, these forward-looking statements can be
identified by words or phrases such as "anticipate," "believe,"
"continue," "estimate," "expect," "intend," "is/are likely to,"
"may," "plan," "should," "will," "aim," "potential," "continue," or
other similar expressions. Forward-looking statements involve
risks, uncertainties and other factors that could cause actual
results to differ materially from those contained in any such
statements. Potential risks and uncertainties include, without
limitation, uncertainties as to the expected benefits and costs of
the proposed Merger, the expected timing of the completion of the
Merger, the parties' ability to complete the Merger considering the
various closing conditions, the possibility that various closing
conditions to the Merger may not be satisfied or waived, how
Synutra's stockholders will vote at the meeting of stockholders,
the possibility that competing offers will be made and other risks
and uncertainties discussed in Synutra's filings with the SEC, as
well as the Schedule 13E-3 transaction statement and the proxy
statement to be filed by Synutra in connection with the Merger. The
forward-looking statements are made as of the date of this press
release. Synutra undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after
the date on which the statements are made or to reflect the
occurrence of unanticipated events.
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SOURCE Synutra International, Inc.