Combined Company to be listed on the NASDAQ
Global Select Market
SourceHOV, LLC (“SourceHOV”), Novitex Holdings, Inc. (“Novitex”)
and Quinpario Acquisition Corp. 2 (Nasdaq:QPAC) (Nasdaq:QPACW)
(Nasdaq:QPACU) (“Quinpario”), a publicly traded special purpose
acquisition company, today announced that they will combine to
create a leading industry-solutions provider for financial
technology and business services, delivering mission critical,
technology-enabled multichannel information services to over 3,500
blue-chip customers in 55 countries. The parties have entered into
a definitive business combination agreement for the proposed
transaction, which is expected to close during the second quarter
of 2017.
Novitex, a North American provider of technology-driven managed
services, is owned by certain funds managed by affiliates of Apollo
Global Management, LLC (together with its consolidated
subsidiaries, “Apollo”) (NYSE:APO). SourceHOV is majority owned by
HandsOn Global Management, LLC (“HGM”) and affiliates, and provides
Transaction Processing Solutions (“TPS”) and Enterprise Information
Management (“EIM”) solutions.
The transaction is valued at approximately $2.8 billion,
representing a 7.3x multiple of the projected 2017E pro forma
EBITDA for the combined company of $385 million. The purchase price
will be funded through a combination of $1.35 billion in new debt
financing, cash from Quinpario, rollover equity and cash on hand at
closing, including from equity financing. Shareholders of
SourceHOV and Novitex are rolling 100 percent of the current
equity, and will be the majority shareholders of the combined
company. All proceeds from the Quinpario equity capital
contribution will be used for deleveraging, to pay fees and
expenses for the transaction, and for general corporate
purposes.
The combined company is expected to have approximately $1.5
billion in revenue in 2017, adding substantial scale and offering a
complementary set of platforms and services to enhance customer
offerings. With technology-enabled services deeply embedded in more
than 60 percent of the FORTUNE® 100, the combined company will be a
core partner for the world’s largest financial services
organizations, insurance payers, healthcare providers, law firms,
government entities and commercial enterprises.
The merger positions the combined company for accelerated
growth, leveraging technology platforms, service offerings and
global delivery supported by more than 23,500 employees across the
Americas, Europe and Asia. With expanded, innovative offerings for
high-volume, mission-critical processes, the combination will
provide integrated platform solutions, from data aggregation and
workflow to exception management and outcome resolutions.
Ron Cogburn, chief executive officer of SourceHOV, commented,
“We are excited about the possibilities the transaction will bring
to the business services sector, as it positions us well for growth
in our key markets. Our journey from people-intensive to
technology-enabled services and our combination with Novitex
fundamentally increases our scale, making us a more strategic
partner to customers in their quest for digital
transformation.”
John Visentin, executive chairman and chief executive officer of
Novitex, added, “The combination of Novitex and SourceHOV supports
our strategy of serving as an end-to-end provider of innovative
cloud-enabled solutions in the document outsourcing
industry. This combination allows us to further enhance our
strategic focus in providing leading-edge, integrated enterprise
information management services.”
The combined company will have a board of directors consisting
of eight members, including three directors to be nominated by HGM,
two directors to be nominated by Apollo and three independent
directors.
The proposed transaction includes committed financing from Royal
Bank of Canada (“RBC”) and Credit Suisse, which is subject to
customary closing conditions. Credit Suisse and RBC Capital Markets
and are also acting as financial advisors to Novitex. Rothschild
Inc. and Morgan Stanley & Co. LLC are acting as financial
advisors to SourceHOV. Moelis & Company LLC is acting as
financial advisor to Quinpario, while Deutsche Bank Securities Inc.
and Cantor Fitzgerald & Co. are acting as capital markets
advisors. Willkie Farr & Gallagher LLP acted as legal
advisor to SourceHOV, Akin Gump Strauss Hauer & Feld LLP and
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal
advisors to Novitex, and Kirkland & Ellis LLP and Graubard
Miller acted as legal advisors to Quinpario.
The transaction is subject to customary and other closing
conditions, including regulatory approvals, receipt of approvals
from Quinpario stockholders, and receipt of proceeds from debt and
equity financing, which are more fully described in a Current
Report on Form 8-K filed by Quinpario on or about the date
hereof.
About SourceHOV SourceHOV is a global TPS and
EIM leader, providing services and solutions for high-volume,
mission-critical processes to blue chip customers across 55
countries, including majority of the FORTUNE® 100.
SourceHOV comprises 16,000 employees and operates over 120
delivery centers across the Americas, Europe and Asia, offering
scalable technology platforms, hosted on premise and/or in a cloud
environment, to a wide range of industries including financial
services, healthcare, public sector, insurance, and legal.
SourceHOV is majority owned by HGM and its affiliated funds, with
Delos Capital (www.deloscap.com) among the remaining
shareholders. For more information, please
visit www.sourcehov.com.
About NovitexNovitex is a technology-based,
managed services provider that offers a range of mail, print,
communications and back office solutions. With a suite of
offerings, Novitex manages and connects a document’s full life
cycle, breaking down operational silos to create more efficient,
cost-effective workflows. For nearly 30 years, FORTUNE 500®, Am Law
200® and federal clients have depended on Novitex to manage their
business processes. Today, Novitex supports 400 clients across
North America with its tech-driven, end-to-end solutions and 7,500
employees. For more information, please
visit www.novitex.com.
About HandsOn Global ManagementHeadquartered in
Santa Monica, California, HGM is a family office that holds
controlling interests in technology-enabled service companies,
leverages the operating experience of its partners and complements
those investments with its ownership of big data mining, FinTech,
InsurTech and HealthTech platforms. For more information, please
visit www.hgmfund.com.
About ApolloApollo is a leading global
alternative investment manager with offices in New York, Los
Angeles, Houston, Chicago, St. Louis, Bethesda, Toronto, London,
Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong
and Shanghai. Apollo had assets under management of approximately
$192 billion as of December 31, 2016 in private equity, credit
and real estate funds invested across a core group of nine
industries where Apollo has considerable knowledge and resources.
For more information about Apollo, please visit www.agm.com.
About QuinparioQuinpario 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 included in this communication are not
historical facts but are forward-looking statements for purposes of
the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by words such as "may", "should", "would", "plan",
"intend", "anticipate", "believe", "estimate", "predict",
"potential", "seem", "seek", "continue", "future", "will",
"expect", "outlook" or other similar words, phrases or expressions.
These forward-looking statements include statements regarding our
industry, future events, the proposed transaction between
Quinpario, SourceHOV and Novitex, the estimated or anticipated
future results and benefits of the combined company following the
transaction, including the likelihood and ability of the parties to
successfully consummate the proposed transaction, future
opportunities for the combined company, and other statements that
are not historical facts. These statements are based on the current
expectations of Quinpario, SourceHOV and Novitex management and are
not predictions of actual performance. These statements are subject
to a number of risks and uncertainties regarding Quinpario.
SourceHOV and Novitex’s respective businesses and the transaction,
and actual results may differ materially. These risks and
uncertainties include, but are not limited to, changes in the
business environment in which SourceHOV and Novitex operate,
including inflation and interest rates, and general financial,
economic, regulatory and political conditions affecting the
industry in which SourceHOV and Novitex operate; changes in
taxes, governmental laws, and regulations; competitive product and
pricing activity; difficulties of managing growth profitably; the
loss of one or more members of Quinpario, SourceHOV or Novitex
management teams; the inability of the parties to successfully or
timely consummate the proposed transaction, including the risk that
the required regulatory approvals are not obtained, are delayed or
are subject to unanticipated conditions that could adversely affect
the combined company or the expected benefits of the transaction or
that the approval of the stockholders of Quinpario is not obtained;
failure to realize the anticipated benefits of the transaction,
including as a result of a delay in consummating the transaction or
a delay or difficulty in integrating the businesses of Quinpario,
SourceHOV and Novitex; uncertainty as to the long-term value of
Quinpario common stock; the inability to realize the expected
amount and timing of cost savings and operating synergies; those
discussed in Quinpario's Annual Report on Form 10-K for the year
ended December 31, 2015 under the heading "Risk Factors," as
updated from time to time by Quinpario’s Quarterly Reports on Form
10-Q and other documents of Quinpario on file with the Securities
and Exchange Commission ("SEC") or in the proxy statement that will
be filed with the SEC by Quinpario. There may be additional risks
that neither Quinpario, SourceHOV or Novitex presently know or that
Quinpario, SourceHOV or Novitex currently believe are immaterial
that could also cause actual results to differ from those contained
in the forward-looking statements. In addition, forward-looking
statements provide Quinpario’s SourceHOV’s and Novitex’s
expectations, plans or forecasts of future events and views as of
the date of this communication. Quinpario, SourceHOV and Novitex
anticipate that subsequent events and developments will cause
Quinpario’s SourceHOV’s and Novitex’s assessments to change.
However, while Quinpario, SourceHOV and Novitex may elect to update
these forward-looking statements at some point in the future,
Quinpario, SourceHOV and Novitex specifically disclaim any
obligation to do so. These forward-looking statements should not be
relied upon as representing Quinpario’s, SourceHOV’s and Novitex’s
assessments as of any date subsequent to the date of this
communication.
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 its respective directors, executive officers and
other members of its 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 interests of
participants in the solicitation, which may, in some cases, be
different than those of Quinpario’s and the target companies’
stockholders generally, 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:
Investor and Industry Inquiries
Melissa H. Zona
Quinpario Acquisition Corp. 2
mhzona@quinpario.com
636-751-4057
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