Quinpario Acquisition Corp. 2 (Nasdaq:QPAC) (Nasdaq:QPACW)
(Nasdaq:QPACU) (“Quinpario”) announced that it entered into a
non-binding letter of intent (“LOI”) today to acquire and combine
two privately owned companies, forming a market-leading business
process outsourcing platform with expertise in financial
technology, information services and data processing. These
businesses are owned respectively by funds managed by a global
private-equity firm with aggregate funds totaling at least $10
billion and a family office-affiliated fund with experience
investing globally in sectors relevant to the proposed transaction.
There are meaningful synergies and strong industrial logic for
these two private targets to combine, which will result in a pro
forma company with approximately $1.5 billion of revenue and $385
million of EBITDA. As a result of the compelling nature of the
combination, both sponsors have agreed to roll 100 percent of their
equity, which would result in combined pro forma ownership by the
sponsors in excess of 50 percent. All proceeds from the
proposed transaction would be used for deleveraging and for general
corporate purposes.
The proposed transaction is valued at a total
enterprise value of approximately $2.7 billion, representing an
approximate 7.0x multiple on projected 2017E pro forma EBITDA for
the combined company of $385 million. The valuation at
consummation of the transaction represents a meaningful discount to
public comparable multiples in the financial technology and
business process outsourcing sectors. At the same time, this
valuation and structure will facilitate a successful execution of
the transaction, thereby providing the combined company with the
requisite capital structure and capital market support to execute
its business plan.
The sponsors and Quinpario have an exclusivity
agreement in order to work toward entering into a definitive
agreement providing for the transaction. Quinpario and the
sponsors have also secured highly confident letters for the
financing necessary to effectuate the transaction and are in the
process of completing due diligence and negotiating a definitive
agreement.
Completion of the transaction is subject to the
negotiation of a definitive agreement providing for the
transaction, satisfaction of the conditions negotiated therein and
approval of the transaction by Quinpario’s stockholders.
Accordingly, there can be no assurance that a definitive agreement
will be entered into or that the proposed transaction will be
consummated. Further, readers are cautioned that those
portions of the LOI that describe the proposed transaction,
including the consideration to be issued therein, are
non-binding.
Notwithstanding that Quinpario has requested
stockholders to approve an extension of time to complete an initial
business combination through July 24, 2017, if Quinpario is unable
to enter into a definitive agreement for an initial business
combination by March 31, 2017, it will promptly file the necessary
proxy materials with the SEC to seek shareholder approval to
dissolve and liquidate.
About Quinpario
Quinpario is a special purpose acquisition company
that completed its initial public offering in January 2015.
Quinpario was formed for the purpose of acquiring one or more
businesses through a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business
combination. Quinpario is sponsored by Quinpario Partners 2, LLC,
which was formed for the expressed purpose of acting as the sponsor
for Quinpario. Quinpario Partners 2, LLC is an affiliate of
Quinpario Partners LLC, an investment and operating company founded
by Mr. Jeffry N. Quinn, former chairman, president and chief
executive officer of Solutia Inc. For more information, please
visit www.quinpario.com.
Forward-Looking Statements
Certain statements made herein are “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words
such as “anticipate”, “believe”, “expect”, “estimate”, “plan”,
“outlook”, and “project” and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. Such forward-looking statements include timing
of the proposed mergers; the business plans, objectives,
expectations and intentions of the parties once the transaction is
complete, and Quinpario’s estimated and future results of
operations, business strategies, competitive position, industry
environment and potential growth opportunities. These
forward-looking statements reflect the current analysis of existing
information and are subject to various risks and uncertainties. As
a result, caution must be exercised in relying on forward-looking
statements. Due to known and unknown risks, our actual results may
differ materially from our expectations or projections.
The following factors, among others, could cause
actual results to differ materially from those described in these
forward-looking statements: the occurrence of any event, change or
other circumstances that could give rise to the terms of the LOI
not hereafter being memorialized in a definitive agreement; the
outcome of any legal proceedings that have been, or will be,
instituted against Quinpario or other parties to the LOI following
announcement of the LOI and transactions contemplated therein; the
ability of Quinpario to meet NASDAQ listing standards following the
mergers and in connection with the consummation thereof; the
inability to complete the transactions contemplated by the LOI due
to the failure to obtain approval of the stockholders of Quinpario
or other conditions to closing in the LOI; the failure to obtain
the necessary financing arrangements set forth in the highly
confident indication letters from debt sources delivered in
conjunction with the LOI; risks that the proposed transaction
disrupts current plans and operations and the potential
difficulties in employee retention as a result of the announcement
of the LOI and consummation of the transaction described therein;
costs related to the proposed mergers and the impact of the
substantial indebtedness to be incurred to finance the consummation
of the mergers; changes in applicable laws or regulations; the
ability of the combined company to meet its financial and strategic
goals, due to, among other things, competition, the ability of the
combined company to grow and manage growth profitability, maintain
relationships with customers and retain its key employees; the
possibility that the combined company may be adversely affected by
other economic, business, and/or competitive factors; and other
risks and uncertainties described herein, as well as those risks
and uncertainties discussed from time to time in other reports and
other public filings with the Securities and Exchange Commission
(the “SEC”) by Quinpario.
Additional information concerning these and other
factors that may impact our expectations and projections can be
found in our periodic filings with the SEC, including our Annual
Report on Form 10-K for the fiscal year ended December 31, 2015,
the definitive proxy statement filed by Quinpario with the SEC on
December 30, 2017 wherein Quinpario is seeking stockholder approval
to extend the date by which Quinpario has to consummate a business
combination from January 22, 2017 to July 24, 2017 (the “Extension
Proxy”), and in the proxy statement to be filed by Quinpario
regarding the transaction memorialized in the LOI with the SEC when
available. Quinpario’s SEC filings are available publicly on the
SEC’s website at www.sec.gov. Quinpario disclaims any obligation to
update the forward-looking statements, whether as a result of new
information, future events or otherwise.
Disclaimer
This communication shall neither 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 the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
Additional Information about the
Transaction and Where to Find It
In connection with the proposed mergers, Quinpario
will file a preliminary proxy statement with the SEC and will mail
a definitive proxy statement and other relevant documents to its
stockholders. Investors and security holders of Quinpario
are advised to read, when available, the preliminary proxy
statement, and amendments thereto, and the definitive proxy
statement in connection with Quinpario’s solicitation of proxies
for its stockholders’ meeting to be held to approve the mergers
because the proxy statement will contain important information
about the mergers and the parties to the mergers. The definitive
proxy statement will be mailed to stockholders of Quinpario as of a
record date to be established for voting on the mergers.
Stockholders will also be able to obtain copies of the proxy
statement, without charge, once available, at the SEC’s website at
www.sec.gov or by directing a request to: Quinpario
Acquisition Corp. 2, 12935 N. Forty Drive, Suite 201, St. Louis, MO
63141, e-mail: mhzona@quinpario.com.
Participants in Solicitation
Quinpario and the target companies and their
respective directors, executive officers and other members of their
management and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of Quinpario
stockholders in connection with the proposed mergers.
Investors and security holders may obtain more detailed
information regarding the names, affiliations and interests in
Quinpario of directors and officers of Quinpario in Quinpario’s
Extension Proxy, which was filed with the SEC on December 30, 2016.
Information regarding the persons who may, under SEC rules, be
deemed participants in the solicitation of proxies to Quinpario’s
stockholders in connection with the proposed mergers will be set
forth in the proxy statement for the proposed mergers when
available. Information concerning the interests of
Quinpario’s and the target companies’ participants in the
solicitation, which may, in some cases, be different than those of
Quinpario’s and the target companies’ stockholders generally, will
be set forth in the proxy statement relating to the mergers when it
becomes available.
Non-GAAP Financial Measure and Related
Information
This communication includes EBITDA - a financial
measure that is not prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”). The items excluded from
EBITDA are important in understanding EBITDA. EBITDA is defined as
net income (loss), before interest expense, income tax benefit
(expense), and depreciation and amortization expense.
EBITDA should not be considered in isolation of, or
as an alternative to, GAAP financial measures.
In addition, certain of the financial information
of the target companies contained herein is unaudited and does not
conform to SEC Regulation S-X and as a result such information may
be presented differently in future filings by Quinpario with the
SEC.
FOR INFORMATION CONTACT:
Melissa H. Zona
Quinpario Acquisition Corp. 2
mhzona@quinpario.com
636-751-4057
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