Combined company to be called Target
Hospitality and expected to be listed on the Nasdaq Stock
Market
Transaction reflects an initial enterprise
valuation for the combined entity of approximately $1.4 billion, or
approximately 8.4x estimated 2019 pro forma Adjusted EBITDA(1),
fully diluted and including transaction expenses
Merger to create the U.S.’s largest provider of
specialty rental accommodation space combining most attractive
elements of premium catering and hospitality value-add services
Combined company to be well-positioned to
capitalize on the strong demand drivers for flexible accommodation
and culinary solutions
Current Target Lodging management team to lead
combined company
Joint Investor Conference Call Scheduled for
November 14, 2018 at 10:00 am EST
Platinum Eagle Acquisition Corp. (Nasdaq:EAGL) (“Platinum
Eagle”), a publicly traded special purpose acquisition company,
Target Logistics Management, LLC (“Target Lodging”), and RL Signor
Holdings, LLC (“Signor Lodging”) announced today that the companies
have entered into definitive merger agreements for a business
combination transaction to create the largest provider of specialty
rental accommodations with premium catering and value-add
hospitality services in the U.S. The combined company will be
well-positioned to capitalize on strong demand drivers for
fully-integrated accommodation, hospitality and culinary solutions
across a range of geographic and sector end markets.
Under the terms of the business combination agreement, Target
Lodging and Signor Lodging will become wholly-owned subsidiaries of
Platinum Eagle. Immediately following the closing of the proposed
transactions, Platinum Eagle intends to change its name to Target
Hospitality Corp. and remain Nasdaq-listed under a new ticker
symbol.
Target Lodging, headquartered in The Woodlands, Texas, is the
largest provider of turnkey accommodations in the U.S., featuring a
vertically-integrated model that provides premium catering and
value-add hospitality solutions. On September 10, 2018, Target
Lodging entered into an agreement to operate and manage Signor
Lodging, a leading provider of specialty rental accommodations to
oil and gas customers in Texas. This strategic transaction expanded
Target Lodging’s footprint and broadened its offerings in the
fundamentally strong Permian and Anadarko Basins, creating more
flexibility to service current and future customers. Target Lodging
and Signor Lodging collectively own and/or operate 22 communities
in the United States with approximately 13,000 total beds,
supporting oil and gas, as well as government agencies and
contractors.
Upon the closing of the proposed transaction, the combined
company is poised to benefit from increased scale and density in
served markets, enhanced vertically-integrated solutions for
customers, greater financial strength, and expanded value-creation
opportunities. The combined company will be led by Target Lodging’s
highly experienced management team, including President and Chief
Executive Officer Brad Archer, Chief Financial Officer Andy
Aberdale and Chief Commercial Officer Troy Schrenk, who will
continue to serve in their respective roles. Stephen Robertson,
Co-Founder of TDR Capital, the private equity firm that owns
Algeco, the parent of Target Lodging, and also owns Signor Lodging,
will serve as Chairman of the combined company and will be joined
on the board by Gary Lindsay, a Partner at TDR Capital, and Jeff
Sagansky, CEO of Platinum Eagle.
The transaction reflects an initial enterprise valuation for the
combined entity of $1.397 billion, representing a fully diluted
multiple, including transaction expenses, of approximately 8.4x
estimated 2019 pro forma Adjusted EBITDA(1). The cash component of
the purchase price to be paid to the equity holders of Target
Lodging will be funded by Platinum Eagle’s cash in trust, which is
approximately $325 million, secured commitments for a $80 million
common stock private placement at $10.00 per share from large
institutional investors, including funds and accounts managed by
investment advisor subsidiaries of Blackrock, Inc., and newly
raised debt financing. The balance of the purchase price for Target
Lodging will be paid in common equity of Platinum Eagle. TDR
Capital will be contributing Signor Lodging in exchange for common
equity of Platinum Eagle.
Jeff Sagansky, CEO of Platinum Eagle, commented, “This strategic
business combination strengthens Target Lodging’s ability to meet
customers' needs through an unparalleled suite of vertically
integrated solutions. It also amplifies Target Lodging’s specialty
rental financial model; powerful unit economics, long-term
contracted revenues, high Adjusted EBITDA(1) margins and strong
free cash flow conversion. In addition, the merged entity should
benefit from substantial revenue upside as we introduce
complementary offerings to Signor’s properties, build new
communities, and expand into new end-markets.”
Brad Archer, CEO of Target Lodging, said, “We are thrilled to
combine the assets of Signor with ours and the significant capital
resources of Platinum Eagle. These transactions will create a
powerful platform and enhance our financial flexibility to
accelerate growth. We look forward to growing our customer base,
building new facilities, and further integrating our culinary and
managed services across our network. We have already begun to
realize meaningful synergies through our existing agreement with
Signor.”
Stephen Robertson, Co-Founder of TDR Capital, said, “The
leadership team of Brad, Andy and Troy, is the most experienced,
knowledgeable and tested group of leaders in the modular,
hospitality, lodging and community development sectors. They have
developed a sales and operational planning process that leverages
cutting-edge data analytics to optimize and drive utilization,
average daily room rate and rental revenue. Under their combined
leadership, Target Hospitality is well-positioned to be the largest
network of flexible communities serving the U.S. workforces,
businesses and governmental needs.”
The respective boards of directors or managers, as applicable,
of Platinum Eagle, Target Lodging and Signor Lodging have
unanimously approved the proposed transaction. Completion of the
proposed transaction is subject to Platinum Eagle stockholder
approval, the condition that Platinum Eagle deliver a minimum of
$225 million from amounts held in its trust account and the
proceeds of additional equity raised certain regulatory approvals
and other customary closing conditions. The parties expect that the
proposed transactions will be completed in the first quarter of
2019.
Deutsche Bank Securities Inc. and BofA Merrill Lynch are acting
as capital markets advisors and private placement agents to
Platinum Eagle. Oppenheimer & Co. Inc. is acting as exclusive
financial advisor on the transaction. Deutsche Bank Securities Inc.
has been a general financial advisor to Platinum Eagle. Winston
& Strawn LLP is acting as legal advisor to Platinum Eagle and
Allen & Overy LLP is acting as legal advisor to Target Lodging
and Signor Lodging.
Conference Call Information
Investors may listen to a pre-recorded call regarding the
proposed transaction at 10:00 am EST on November 14, 2018. The
pre-recorded call may be accessed by dialing (888) 820-4544 for
domestic callers or (470) 279-3876 for international callers. Once
connected with the operator, please provide the entry code of
“asset89.”
A replay of the call will also be available from 1:00 pm EST on
November 14, 2018 to 11:59 pm EST on December 4, 2018. To access
the replay, the domestic toll-free access number is (855) 213-8235
and participants should provide the entry code of “33503#.”
On the call, the presenters will be reviewing an investor
presentation, which will be filed with the Securities and Exchange
Commission (“SEC”) as an exhibit to a Current Report on Form 8-K
prior to the call, and available on the SEC website at
www.sec.gov.
Additional Information about the Transaction and Where to
Find It
In connection with the proposed business combination, Platinum
Eagle has filed a registration statement on Form S-4 (the
"Registration Statement") with the SEC, which will include a proxy
statement/prospectus, that will be both the proxy statement to be
distributed to holders of Platinum Eagle's ordinary shares in
connection with Platinum Eagle's solicitation of proxies for the
vote by Platinum Eagle's shareholders with respect to the business
combination and other matters as may be described in the
Registration Statement, as well as the prospectus relating to the
offer and sale of the securities to be issued in the business
combination. After the Registration Statement is declared
effective, Platinum Eagle will mail a definitive proxy
statement/prospectus and other relevant documents to its
shareholders. Platinum Eagle's shareholders and other interested
persons are advised to read, when available, the preliminary proxy
statement/prospectus included in the Registration Statement and the
amendments thereto and the definitive proxy statement/prospectus,
as these materials will contain important information about
Williams Scotsman, Platinum Eagle and the business combination. The
definitive proxy statement/prospectus will be mailed to
shareholders of Platinum Eagle as of a record date to be
established for voting on the business combination. Shareholders
will also be able to obtain copies of the proxy
statement/prospectus and other documents filed with the SEC that
will be incorporated by reference in the proxy
statement/prospectus, without charge, once available, at the SEC's
web site at www.sec.gov, or by directing a request to: Platinum
Eagle Acquisition Corp., 2121 Avenue of the Stars, Suite 2300, Los
Angeles, California, Attention: Eli Baker, President, Chief
Financial Officer and Secretary, (310) 209-7280.
Participants in the Solicitation
Platinum Eagle and its directors and executive officers may be
deemed participants in the solicitation of proxies from Platinum
Eagle's shareholders with respect to the business combination. A
list of the names of those directors and executive officers and a
description of their interests in Platinum Eagle is contained in
Platinum Eagle's Annual Report on Form 10-K for the fiscal year
ended December 31, 2017, which was filed with the SEC and is
available free of charge at the SEC's web site at www.sec.gov, or
by directing a request to Platinum Eagle Acquisition Corp., 2121
Avenue of the Stars, Suite 2300, Los Angeles, California,
Attention: Eli Baker, President, Chief Financial Officer and
Secretary, (310) 209-7280. Additional information regarding the
interests of such participants are contained in the proxy
statement/prospectus for the business combination.
Each of Target Lodging and Signor Lodging and its directors and
executive officers may also be deemed to be participants in the
solicitation of proxies from the shareholders of Platinum Eagle in
connection with the business combination. A list of the names of
such directors and executive officers and information regarding
their interests in the business combination are contained in the
proxy statement/prospectus for the business combination.
About Platinum Eagle Acquisition Corp.
Platinum Eagle was formed for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses.
Platinum Eagle raised $325 million in its initial public offering
and began trading on Nasdaq in January 2018. Its Class A ordinary
shares, units and warrants trade under the ticker symbols EAGL,
EAGLU and EAGLW, respectively.
About Target Lodging
Founded in 1978, Target Lodging is the largest vertically
integrated specialty rental and hospitality services company in the
United States. The company is principally focused
on building, owning and operating housing
communities across several end markets, including oil, gas,
energy infrastructure and government. Target Lodging provides
cost-effective and customized specialty rental accommodations,
culinary services, and hospitality solutions, including site
design, construction, operations, security, housekeeping, catering,
concierge services, and health and recreation facilities as part of
its integrated housing and hospitality
communities. Target Lodging was named by Inc. magazine in 2012
and 2013 as one of “America’s Fastest Growing Private
Companies.” Target Lodging has been an Algeco company since
2013.
About Signor Lodging
Signor Lodging, founded in 1990, specializes in superior remote
workforce housing serving oil and gas customers throughout the
Permian and Eagle Ford Basins. Signor Lodging operates nine
properties across West Texas, Southeast New Mexico and
Oklahoma.
Forward-Looking Statements
Certain statements made in this release are "forward looking
statements" within the meaning of the "safe harbor" provisions of
the United States Private Securities Litigation Reform Act of 1995.
When used in this press release, the words "estimates,"
"projected," "expects," "anticipates," "forecasts," "plans,"
"intends," "believes," "seeks," "may," "will," "should," "future,"
"propose" and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. These forward-looking
statements are not guarantees of future performance, conditions or
results, and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside Platinum Eagle's, Target Lodging’s or Signor
Lodging’s control, that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking
statements. Important factors, among others, that may affect actual
results or outcomes include the inability to complete the business
combination (including due to the failure to receive required
shareholder approvals, or the failure of other closing conditions);
the inability to recognize the anticipated benefits of the proposed
business combination; the inability to meet Nasdaq listing
standards; costs related to the business combination; Target
Hospitality’s ability to manage growth; Target Hospitality’s
ability to execute its business plan and meet its projections;
Target Hospitality’s ability to identify, consummate and integrate
acquisitions; rising costs adversely affecting Target Hospitality’s
profitability; potential litigation involving Platinum Eagle,
Target Lodging, Signor Lodging, or after the closing, Target
Hospitality, and general economic and market conditions impacting
demand for Target Lodging’s products and services, and in
particular economic and market conditions in the oil industry in
the markets in which Target Hospitality operates. None of Platinum
Eagle, Target Lodging or Signor Lodging undertakes any obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
(1) Non-GAAP Financial Measures
This press release includes projected Adjusted EBITDA, which is
a measurement not calculated in accordance with U.S. generally
accepted accounting principles (“GAAP”). Platinum Eagle, Target
Lodging and Signor Lodging believe that this non-GAAP measure is
useful to investors for two principal reasons. First, they believe
this measure assists investors in comparing performance over
various reporting periods on a consistent basis by removing from
operating results the impact of items that do not reflect core
operating performance. Second, it is a key metric used by
management to assess financial performance and may (subject to the
limitations described below) enable investors to compare the
performance of the combined company to its competitors. Platinum
Eagle, Target Lodging and Signor Lodging believe that the use of
this non-GAAP financial measure provides an additional tool for
investors to use in evaluating ongoing operating results and
trends. This non-GAAP measure should not be considered in isolation
from, or as an alternative to, financial measures determined in
accordance with GAAP. Other companies may calculate Adjusted EBITDA
and other non-GAAP financial measures differently, and therefore
Adjusted EBITDA used herein may not be directly comparable to
similarly titled measures of other companies.
Adjusted EBITDA is defined as net income (loss) before income
tax expense, net interest expense, depreciation and amortization
adjusted for non-cash items considered non-core to business
operations including net currency losses, change in fair value of
contingent considerations, goodwill and other impairment charges,
restructuring costs and other non-recurring expenses. Pro forma
Adjusted EBITDA includes an annualized estimate of standalone
public company costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181113006260/en/
ICR for Platinum EagleInvestorsRodny Nacier,
646-677-1237Rodny.Nacier@icrinc.com
MediaJason Chudoba,
646-677-1249Jason.Chudoba@icrinc.comorElyse Gentile,
646-677-1823Elyse.Gentile@icrinc.com
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