Quality Distribution, Inc., a North American logistics and transportation provider with market leading businesses, today announced that it has entered into a definitive agreement to be acquired by funds advised by Apax Partners, a global private equity firm, for approximately $800 million, including the assumption of debt, or $16.00 per share in cash.
The transaction price represents a premium of approximately 63% over Quality Distribution’s closing share price on May 6, 2015. Quality Distribution believes that the transaction provides its shareholders with an attractive premium that delivers immediate compelling value for their shares. The definitive agreement was unanimously approved by Quality Distribution’s Board of Directors, which recommended that Quality Distribution’s shareholders approve the agreement.
The acquisition is subject to customary closing conditions, including obtaining the approval of the holders of a majority of the total outstanding shares of Quality Distribution common stock and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to be completed in the third quarter of 2015. Under the terms of the agreement, Quality Distribution may solicit alternative proposals from third parties during a 40-day "go-shop" period following the date of execution of the definitive agreement. There can be no assurances that this process will result in a superior acquisition proposal.
“We believe our sale to Apax maximizes value for our shareholders and provides Quality Distribution with the increased financial flexibility we need to continue to grow,” said Gary Enzor, Chairman and Chief Executive Officer of Quality Distribution. “Apax supports our strategy and is committed to helping us continue our pursuit of strategic growth in our Chemical and Intermodal businesses while managing the current market conditions in the energy industry. They will bring financial resources and expertise that will assist us as we expand Quality Distribution through internal investment and initiatives as well as disciplined acquisitions. This, in turn, should provide more opportunities for our employees and independent affiliates and benefit our customers through greater scale and cost-effective capabilities.”
Quality Distribution operates the largest chemical bulk logistics network in North America through its wholly-owned subsidiary, Quality Carriers, Inc., and is the largest North American provider of intermodal tank container and depot services through its wholly-owned subsidiary, Boasso American Corporation. Quality also provides logistics and transportation services to the unconventional oil and gas industry through its wholly-owned subsidiary, QC Energy Resources, Inc. Quality’s network of independent affiliates and independent owner-operators provides nationwide bulk transportation and related services. Quality is an American Chemistry Council Responsible Care® Partner and is a core carrier for many of the Fortune 500 companies that are engaged in chemical production and processing.
“Having followed Quality for several years, we have been impressed with the strategy and vision articulated by the Company’s management team,” said Ashish Karandikar, a Partner on Apax’s Services team. “As the leading logistics platform in the bulk chemical transportation industry, Quality is well positioned to take advantage of both organic growth opportunities and strategic acquisitions while benefiting from the financial and operational flexibility of operating as a private company. We look forward to partnering with Quality’s management team as they pursue the Company’s next phase of growth.”
RBC Capital Markets is serving as financial advisor to Quality Distribution, and Fried, Frank, Harris, Shriver & Jacobson LLP is serving as legal counsel to Quality Distribution. Skadden Arps, Slate, Meagher & Flom LLP and Kirkland & Ellis LLP are serving as legal counsel to Apax.
Apax has secured committed financing for the transaction, which will be provided by Deutsche Bank AG New York Branch, Bank of America, N.A., Jefferies Finance LLC, MIHI LLC and SunTrust Bank.
Quality Distribution intends to announce its first quarter 2015 financial results in a separate press release on Wednesday, May 6, 2015. In light of the pending transaction, Quality Distribution has cancelled its previously scheduled first quarter 2015 financial results conference call.