Affiliates of GS Capital Partners and P2 Capital Partners, LLC (are to acquire Interline Brands for USD25.50 per share in cash.
The transaction, which has been unanimously approved by Interline’s board of directors, is valued at approximately USD1.1 billion, including the assumption of debt. The price of USD25.50 per share represents a premium of approximately 42% relative to the Company’s closing stock price on 25 May, 2012, the last trading day before the announcement of the transaction, and a 31% premium relative to the Company’s trailing 30-day average closing stock price.
"This agreement provides excellent value to shareholders. This is also an exciting new chapter for Interline, one that we believe will bring broad benefits to all of our stakeholders," says Michael J Grebe, Interline’s Chairman and Chief Executive Officer. "We remain laser-focused on our goals and capabilities, and look forward to working with partners that have proven track records of investments in the distribution sector, as well as financial and operational expertise in global markets. Moreover, Interline has operated successfully in both public and private settings in the past. As we now look forward, GS Capital Partners and P2 Capital Partners have a shared vision of our value creation opportunities and the actions needed to realise them."
Interline intends to maintain its corporate headquarters in Jacksonville, Florida, as well as its distribution and sales footprint.
In addition to equity from funds managed by GS Capital Partners and P2 Capital Partners, it is anticipated that certain members of Company management will invest a portion of their proceeds from the transaction. GS Capital Partners and P2 Capital Partners have also secured committed debt financing from Goldman Sachs and Bank of America.
Barclays is serving as financial advisor to Interline and has provided a fairness opinion in connection with the transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to the Company in connection with the transaction.
Goldman Sachs is acting as financial advisor to GS Capital Partners, and Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal advisor. Debevoise & Plimpton LLP is acting as legal advisor to P2 Capital Partners.
The transaction is subject to certain closing conditions, including the approval of Interline’s shareholders and regulatory approvals, but is not subject to any condition with regard to the financing of the transaction.
The agreement permits Interline to solicit alternative proposals from third parties through June 28, 2012. The Interline board of directors, with the assistance of its advisors, will actively solicit acquisition proposals during this period. If there is not a superior offer, the transaction is expected to close by the end of the third quarter of 2012.
Interline will be submitting a current report on Form 8-K with the US Securities and Exchange Commission containing a summary of terms and conditions of the proposed acquisition.
