DEERFIELD, Ill., May 16, 2018 /PRNewswire/ -- Essendant Inc.
(Nasdaq: ESND) today confirmed that it received an unsolicited
proposal from Staples, Inc. to acquire all shares of Essendant
stock for $11.50 per share in cash.
Essendant's confirmation follows today's Schedule 13D filing with
the U.S. Securities and Exchange Commission by Staples, Inc.,
Sycamore Partners and certain affiliates disclosing a 9.9%
ownership stake in Essendant. Staples is a portfolio company
of Sycamore Partners.
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On April 17, 2018, Staples
communicated its initial proposal to Essendant, which Essendant
declined after thorough review by its Board in consultation with
its financial and legal advisors. Staples sent a revised
proposal on April 29, 2018 stating
that it believed it will be able to identify incremental value
opportunities to enable it to increase its offer significantly in
excess of $11.50 per share after
receiving confidential information and engaging in discussions with
Essendant. On May 4, 2018, in
consultation with its financial and legal advisors, Essendant's
Board determined that Staples' revised proposal is reasonably
likely to lead to a "Superior Proposal" as defined in the merger
agreement with Genuine Parts Company ("GPC"). There can be no
assurance that the Staples proposal will result in a
transaction.
On May 7, 2018, GPC made an
enhanced proposal to the previously announced merger agreement with
Essendant under which Essendant shareholders would be provided a
nontransferable right to a contingent cash payment following
completion of the merger and based on the subsequent trading price
of Essendant shares. The contingent payment would have a maximum
value of $4.00 per share and a
minimum value of zero. Specifically, the contingent payment
would be equal to $12.00 per share
minus the greater of (a) the weighted average price of Essendant
shares during a 20-day measurement period ending at the later of
(i) December 31, 2019 or (ii) the
12-month anniversary of closing, or (b) $8.00, subject to other terms and
conditions. There can be no assurance that the GPC merger
agreement will be amended to incorporate this proposal.
As previously announced on April 12,
2018, Essendant entered into a definitive merger agreement
to combine Essendant and GPC's S.P. Richards business in a Reverse
Morris Trust transaction. Upon closing of the transaction, GPC
shareholders will own approximately 51% and Essendant shareholders
will own approximately 49% of the combined company. The
merger agreement with GPC remains in effect, and the Essendant
Board has not changed its recommendation that Essendant's
shareholders vote in favor of that transaction.
Citigroup Global Markets Inc. is acting as financial advisor and
Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal
counsel to Essendant.
Cautionary Statements
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.
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. 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.
Contacts
Janet Zelenka – Senior Vice
President and CFO – (847) 627-7000
Ryon Wharton – Vice President
Finance and Investor Relations – (847) 627-2900
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SOURCE Essendant Inc.