RED BANK, N.J., Jan. 12, 2018 /PRNewswire/ -- ZAIS Group
Holdings, Inc. (NASDAQ: ZAIS) ("ZAIS" or the "Company") today
announced that it has signed a definitive merger agreement with Z
Acquisition LLC, a Delaware
limited liability company ("Z Acquisition"), and ZGH Merger Sub,
Inc., a wholly-owned subsidiary of ZAIS. Christian Zugel, the founder of ZAIS Group, LLC,
the Company's operating subsidiary, and the Company's Chairman and
Chief Investment Officer, is the sole managing member of Z
Acquisition. Pursuant to the merger agreement, all of the
outstanding common stock of ZAIS that is not (i) beneficially owned
by (A) Z Acquisition, the members of Z Acquisition (including Mr.
Zugel and Daniel Curry, the
Company's President and Chief Executive Officer), certain trusts
for members of Mr. Zugel's family, and Mr. Zugel's current spouse
(collectively, "Purchaser Group"), or (B) any person who, after the
date hereof, acquires common stock of ZAIS through certain
issuances pursuant to an exercise of exchange rights, or (ii) owned
by certain stockholders who agree with Z Acquisition to retain
certain of their common stock in connection with the merger, will
be converted into the right to receive $4.10 per share in cash, less any required
withholding taxes (the "Merger").
The $4.10 per share price
represents a premium of more than 138% to the closing price of the
Company's shares of Class A common stock ("Class A Common Stock")
on September 5, 2017, the last
trading day before the initial proposal from Mr. Zugel and Z
Acquisition was publicly disclosed. The majority of the funding for
payments required to be made to stockholders of the Company in the
Merger will be provided by existing cash of the Company, but a
portion of the funding for such payments will be provided by Z
Acquisition by means of an acquisition of Class A Units of the
Company's majority-owned subsidiary, ZAIS Group Parent, LLC
("ZGP").
As previously disclosed on September 5,
2017, Z Acquisition and Mr. Zugel entered into a Share
Purchase Agreement (as amended, the "Share Purchase Agreement")
with Ramguard LLC ("Ramguard") to purchase from Ramguard 6,500,000
shares of Class A Common Stock at $4.00 per share. That agreement has been amended
and restated to provide that the purchase price for the Ramguard
shares will be the same $4.10 per
share price to be paid in the Merger. Once this share
purchase is completed, Z Acquisition will own, before consummation
of the Merger, approximately 44.66% of the Company's currently
outstanding Class A Common Stock and Purchaser Group overall will
own approximately 48.01% of the currently outstanding Class A
Common Stock.
The Company's Board of Directors, acting on the unanimous
recommendation of the special committee formed by the Board of
Directors (the "Special Committee"), approved the merger agreement
and the transactions contemplated by the merger agreement and
resolved to recommend that the Company's stockholders adopt the
merger agreement and the transactions contemplated by the merger
agreement. The Special Committee, which is comprised solely of
independent and disinterested directors of the Company who are
unaffiliated with Purchaser Group and management of the Company,
negotiated the terms of the merger agreement with Purchaser Group,
with the assistance of its legal and financial advisors.
Paul Guenther, Chairman of the
Special Committee, said, "We are confident that we have negotiated
a fair price and that this merger is in the best interest of our
minority stockholders. The price of $4.10 is an approximately 138% premium over the
last trading day before the offer."
Mr. Zugel said, "On behalf of Z Acquisition, we are pleased to
have reached this agreement, which we believe is in the best
interests of unaffiliated stockholders of the Company."
Immediately after the closing of the Merger, ZAIS will become a
subsidiary of Z Acquisition. ZAIS is expected to continue its
operations and remain headquartered in New Jersey. ZAIS's executive management team
generally is expected to remain in place.
The Merger is subject to approval by the Company's stockholders
(including a non-waivable condition requiring approval by the
holders of a majority of the outstanding shares of Class A Common
Stock that are not beneficially owned by the members of Purchaser
Group, any director or executive officer of the Company, Ramguard,
holders of shares that will remain outstanding following the
Merger, or any of their respective affiliates), as well as
fulfillment of certain other closing conditions. The merger
agreement provides for a non-solicitation covenant on the part of
the Company, subject to customary "fiduciary out" provisions. If Z
Acquisition or the Company, pursuant to a resolution of the Special
Committee, were to terminate the merger agreement under certain
circumstances, the Company will be required to reimburse the
members of Purchaser Group up to a maximum of $1,500,000, in the aggregate, for costs relating
to the merger agreement and the Merger. The Merger is not subject
to a financing condition.
The Company will in due course call a meeting of stockholders
for the purpose of voting on the adoption of the merger agreement.
If completed, the Merger will result in the Company becoming a
privately-held company and the Company's common stock would no
longer be listed on NASDAQ. Furthermore, if the Merger is
completed, current financial and business information of the
Company would no longer be available because the Company would no
longer be required to file periodic reports.
Houlihan Lokey is serving as
financial advisor to the Special Committee, and Alston & Bird
LLP is serving as legal counsel to the Special Committee.
McDermott Will & Emery LLP is
serving as legal counsel to the Company. Fried, Frank, Harris,
Shriver & Jacobson LLP is serving as legal counsel to Purchaser
Group.
ABOUT Z ACQUISITION AND PURCHASER GROUP
Z Acquisition was formed as a special-purpose vehicle for Mr.
Zugel and the other members of Purchaser Group, for the primary
purpose of entering into the Share Purchase Agreement and the
merger agreement. Mr. Zugel is (i) the founder of ZAIS Group, LLC,
the Company's operating subsidiary; (ii) the holder, in his
capacity as voting trustee of a trust, the beneficiaries of which
are members of Mr. Zugel's family and his former spouse, of
100% of the Company's Class B common stock (which provides Mr.
Zugel effective voting control over matters put to a vote of the
Company's stockholders, including the election of directors); (iii)
the Chairman of the Board of Directors of the Company; (iv) the
Company's Chief Investment Officer; and (v) the sole managing
member of Z Acquisition. Mr. Zugel is also the owner of
3,325,000 Class A Units of ZAIS Group Parent, LLC, the Company's
majority owned subsidiary, which are exchangeable, under certain
circumstances, for, at the Company's option, cash, shares of Class
A Common Stock (on a one-for-one basis), or a combination of the
two, and family members and affiliates of Mr. Zugel (including his
former spouse) own an additional 3,675,000 Class A Units of ZAIS
Group Parent, LLC that are also so exchangeable under certain
circumstances as described above.
ABOUT ZAIS GROUP HOLDINGS, INC.
ZAIS (NASDAQ: ZAIS) owns a majority interest in, and is the
managing member of, ZAIS Group Parent, LLC. ZAIS Group Parent, LLC
is the sole member of ZAIS Group, LLC, an investment advisory and
asset management firm focused on specialized credit strategies with
approximately $4.144 billion of
assets under management as of September 30,
2017. Based in Red Bank, New
Jersey, with operations also in London, ZAIS Group, LLC employs professionals
across investment management, client relations, information
technology, analytics, finance, law, compliance, risk management
and operations. To learn more, visit www.zaisgroup.com.
Important Additional Information
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of ZAIS by Purchaser Group. In
connection with the proposed merger, ZAIS will file with the U.S.
Securities and Exchange Commission (the "SEC") and furnish to the
Company's stockholders a proxy statement and other relevant
documents. This filing does not constitute a solicitation of any
vote or approval. BEFORE MAKING ANY VOTING DECISION, THE COMPANY'S
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY
WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS TO BE FILED WITH
THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY
REFERENCE IN THE PROXY STATEMENT BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
Investors will be able to obtain a free copy of the proxy
statement, when available, and other relevant documents filed by
ZAIS with the SEC at the SEC's website at www.sec.gov. In addition,
investors may obtain a free copy of the proxy statement, when
available, and other relevant documents from the Company's website
at www.zaisgroup.com in the section "ZAIS SHAREHOLDERS"
or by directing a written request to the Company's Secretary at
ZAIS Group Holdings, Inc., Two Bridge Avenue, Suite 322,
Red Bank, New Jersey 07701 or
calling 732.530.3610.
Participants in the Solicitation
ZAIS and its directors, executive officers and certain other
members of management and employees of ZAIS may be deemed to be
"participants" in the solicitation of proxies from the stockholders
of ZAIS in connection with the proposed merger. Information
regarding the interests of the persons who may, under the rules of
the SEC, be considered participants in the solicitation of the
stockholders of ZAIS in connection with the proposed merger, which
may be different than those of the Company's stockholders
generally, will be set forth in the proxy statement and the other
relevant documents to be filed with the SEC. Stockholders can find
information regarding the ownership of the Company's directors and
executive officers in ZAIS stock and other equity is included in
the Company's SEC filings on Forms 3, 4, and 5, which can be found
through the Company's website www.zaisgroup.com in the section
"ZAIS SHAREHOLDERS" or through the SEC's website at www.sec.gov.
Information can also be found in the Company's other SEC filings,
including the Company's definitive proxy statement for the 2016
Annual Meeting of Stockholders and its Annual Report on Form 10-K
for the year ended December 31,
2016.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains statements that constitute
"forward-looking statements," as such term is defined in Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, and such
statements are intended to be covered by the safe harbor provided
by the same. This communication contains forward-looking statements
related to ZAIS, Purchaser Group and the proposed acquisition of
ZAIS by Purchaser Group and their respective affiliates. Actual
results and events in future periods may differ materially from
those expressed or implied by these forward-looking statements
because of a number of risks, uncertainties and other factors. All
statements other than statements of historical fact, including
statements containing the words "aim," "anticipate," "are
confident," "estimate," "expect," "will be," "will continue," "will
likely result," "project," "intend," "plan," "believe" and other
words and terms of similar meaning, or the negative of these terms,
are statements that could be deemed forward-looking statements.
Risks, uncertainties and other factors include, but are not limited
to: (i) the occurrence of any event, change or other circumstances
that could give rise to the termination of the merger agreement;
(ii) the inability to complete the proposed merger due to the
failure to obtain stockholder approval for the proposed merger or
the failure to satisfy other conditions to completion of the
proposed merger; (iii) the failure of the proposed merger to close
for any other reason; (iv) risks related to disruption of
management's attention from the Company's ongoing business
operations due to the transaction; (v) the outcome of any legal
proceedings, regulatory proceedings or enforcement matters that may
be instituted against ZAIS and others relating to the merger
agreement; (vi) the risk that the pendency of the proposed merger
disrupts current plans and operations and the potential
difficulties in employee retention as a result of the pendency of
the proposed merger; (vii) the effect of the announcement of the
proposed merger on the Company's relationships with its customers,
operating results and business generally; and (viii) the amount of
the costs, fees, expenses and charges related to the proposed
merger. Consider these factors carefully in evaluating the
forward-looking statements. Additional factors that may cause
results materially different from those described in the
forward-looking statements are set forth in the Company's Annual
Report on Form 10-K and other reports filed by the Company with the
SEC, copies of which are available on the SEC's website,
www.sec.gov. The Company undertakes no obligation to update these
statements for revisions or changes after the date of this release,
except as required by law.
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SOURCE ZAIS Group Holdings, Inc.