WinWholesale Agrees to Acquire Noland Company for $74 Per Share
April 12 2005 - 8:30AM
PR Newswire (US)
WinWholesale Agrees to Acquire Noland Company for $74 Per Share
NEWPORT NEWS, Va., April 12 /PRNewswire-FirstCall/ -- Noland
Company (NASDAQ:NOLD) today announced it has signed an agreement of
merger with WinWholesale, a national wholesale distributor. Under
the terms of the agreement, which was unanimously approved by a
special committee of Noland's board of directors as well as by both
companies' boards, WinWholesale will pay $74 in cash for each
Noland Company share and assume Noland's outstanding debt at
closing. The transaction will be structured as a tender offer for
all the outstanding shares of Noland Company, followed by a merger
that would convert each remaining untendered share of Noland
Company into $74 cash. The $74 per share offer represents a 52
percent, or $25.42 premium for Noland shareholders based on the
market closing price of $48.58 on April 11 and a 42 percent, or
$21.85, premium, over Noland's book value as of December 31, 2004.
Each of Noland's board of directors and the special committee of
Noland's board of directors has unanimously recommended to Noland
shareholders that they accept the WinWholesale offer and tender
their shares. Founded in 1915 and headquartered in Newport News,
Virginia, Noland is a leading independent wholesale distributor of
mechanical equipment and supplies. Noland operates 101 branches in
13 states, primarily in the South, and has approximately 1,400
employees. Sales in 2004 totaled $548.1 million. WinWholesale
(incorporated as Primus Inc.) is one of the largest wholesale
distributors in the U.S., with annual revenues of approximately
$1.4 billion. It is the equity partner in more than 400 local
wholesale companies located in 41 states, primarily in the
Northeastern, Midwestern and Western U.S. Lloyd U. Noland, III,
chairman and president of Noland Company, and grandson of the
company's founder, L.U. (Casey) Noland, said he felt the timing was
right to sell the company, which is publicly traded but controlled
by the Noland family through ownership of approximately 62 percent
of the outstanding shares. "In order to obtain the critical mass
required to be a long-term player in this industry," said Noland,
"we would have to recapitalize the company to fund accelerated
growth -- growth that would be a multi-year process. At my age, I
wasn't willing to tackle it. In addition, the time and expense
associated with complying with Sarbanes-Oxley was pushing us to
consider either going private or selling. Since our most attractive
alternative was to find a merger partner, I am delighted that
WinWholesale has made us an attractive offer. "Together, Noland
Company and WinWholesale represent 140 years of providing
outstanding wholesaling services throughout the United States. We
are pleased to entrust Noland Company's future in the hands of
WinWholesale, a company that has demonstrated its ability to grow
revenues and profits and to provide opportunities to its employees
as well as value to its customers." Rick Schwartz, president and
CEO of WinWholesale, stated: "We have been looking for a partner
whose geographic reach complements WinWholesale's existing local
companies. We believe that WinWholesale's and Noland's customers
will benefit from our collective 5,100 employees, 530 locations in
43 states and more than $300 million of inventory ready to serve
their needs. We are confident that combining the WinWholesale and
Noland organizations will spur further growth and profit
opportunities throughout the distribution chain." It is expected
that the tender offer will commence no later than April 18, 2005,
and is expected to close by May 16, 2005, unless extended. The
tender offer will be subject to customary closing conditions,
including receipt of regulatory approvals and the tender of more
than two-thirds of the outstanding Noland shares. Noland's board
members control approximately 63 percent of the outstanding shares
on a fully diluted basis. Following the close of the tender, any
shares not tendered will be acquired at $74 per share in cash in a
subsequent merger. William Blair & Co. acted as financial
advisor to WinWholesale and will serve as the dealer manager on the
tender offer. The Blackstone Group L.P. served as financial advisor
to Noland and rendered an opinion as to the fairness to the Noland
shareholders from a financial point of view of the transaction
price. Shareholders of Noland are strongly encouraged to read the
Tender Offer Statement on Schedule TO to be filed by WinWholesale
and the Solicitation/Recommendation statement on Schedule 14D-9 to
be filed by Noland when these documents become available. These
documents will contain important information about the tender
offer. Investors may obtain the Tender Offer Statement on Schedule
TO, the Solicitation/Recommendation Statement on Schedule 14D-9 and
any other documents filed with the Securities and Exchange
Commission for free at the SEC's website, http://www.sec.gov/ and
at Noland's website, http://www.noland.com/. This press release may
contain forward-looking statements, including statements about the
timing and completion of an all cash tender offer for Noland
Company outstanding shares, the ability to complete the tender
offer and subsequent merger on the terms contemplated, the value of
the transaction, the anticipated impact of the acquisition on
Noland Company operations and financial results and other
projections within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements are subject to risks and uncertainties, including
the risks and uncertainties disclosed in Noland Company's filings
with the Securities and Exchange Commission, including its annual
report on Form 10-K for the fiscal year ended December 31, 2004,
that could cause actual results to differ materially from those
projected in these forward-looking statements. These statements
speak only as of the date of this press release, and Noland Company
and WinWholesale undertake no obligation to update or revise any of
the statements, risks or reasons why actual results might differ.
All forward- looking statements are expressly qualified in their
entirety by this cautionary statement. DATASOURCE: Noland Company
CONTACT: John E. Gullett of Noland Company, +1-757-928-9000 Web
site: http://www.noland.com/
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