All-Cash Tender Offer of $29 Per
Share
Span-America Medical Systems, Inc. (“Span-America”)
(NASDAQ:SPAN) announced today that it has reached an agreement to
be acquired by Savaria Corporation, an Alberta, Canada
corporation (“Savaria”) (TSX:SIS). Savaria intends to acquire
Span-America by way of an all-cash tender offer for $29 per share,
or approximately $80.2 million. The transaction is expected to
close in the second calendar quarter of 2017.
Tom Henrion, Chairman of Span-America’s board of directors,
said, “The Board of Directors of Span-America unanimously approved
the proposed acquisition of Span-America by Savaria. The proposed
all-cash tender offer of $29 per share represents an immediate and
substantial cash value as well as a significant premium over our
stock price, and we believe it fully values the company for our
shareholders. Savaria’s offer reflects the value that our
management and employee team has created for our shareholders. All
of Span-America’s board members and senior managers have agreed to
tender their shares in the tender offer.”
Founded in 1979, Savaria provides accessibility solutions for
the elderly and physically challenged to increase their mobility
and independence. Savaria designs, manufactures, distributes and
installs accessibility equipment, such as stair lifts for straight
and curved stairs, vertical and inclined wheelchair lifts,
elevators for home and commercial use, as well as patient lifts. In
addition, it converts and adapts vehicles to be wheelchair
accessible. It also operates a network of franchisees and corporate
stores through which new and recycled accessibility equipment is
sold and, in certain locations, vehicle conversions are performed.
Savaria records close to 60% of its revenue outside Canada,
primarily in the United States. It operates a sales network of some
400 retailers and affiliates in North America and employs some 500
people. Its principal places of business are located in Laval,
Quebec, Brampton, Ontario, and Huizhou, China.
Structure and Terms
Under the terms of the transaction, Span-America shareholders
will receive $29 in cash per share. This represents a premium of
33% to Span-America’s closing share price on NASDAQ on April 28,
2017, the last full trading day prior to the announcement date of
the Transaction, and a premium of 33% to Span-America’s 20-day
volume weighted average closing price, calculated as at April 28,
2017. Savaria has indicated that it will finance the transaction
with cash on hand, a financing commitment from National Bank of
Canada and a Canadian equity private placement of subscription
receipts.
The transaction is subject to customary closing conditions,
including receipt of two-thirds of Span-America’s shares on a fully
diluted basis in a tender offer to Span-America’ shareholders. All
of the members of Span-America’s board of directors and its senior
officers have entered into tender support agreements with Savaria
committing, subject to certain conditions and exceptions, to tender
(without a right of withdrawal) all of their Span-America shares,
constituting in aggregate approximately 15.9% of its outstanding
shares. Following the successful completion of the tender offer,
Savaria will acquire all remaining shares not tendered in the
tender offer through a second-step merger at the same price per
share as that payable under the offer. The transaction is expected
to close in the second calendar quarter of 2017.
About Span-America Medical Systems, Inc.
Span-America manufactures and markets a comprehensive selection
of pressure management products for the medical market, including
Geo-Matt®, PressureGuard®, Geo-Mattress®, Custom Care®, Span+Aids®,
Isch-Dish®, Risk Manager® and Selan® products. Through our
wholly-owned subsidiary Span Medical Products Canada Inc., we
manufacture and market the Encore®, Advantage and Rexx beds as
well as related in-room furnishing products for the long-term care
market. We also supply custom foam and packaging products to the
consumer and industrial markets. Span-America’s stock
is traded on The NASDAQ Global Market under the
symbol “SPAN.” For more information, please visit
www.spanamerica.com.
Advisors
Robert W. Baird & Co. served as Span-America’s financial
advisors and Wyche, P.A. served as Span-America’s legal counsel for
the transaction.
Investor Conference Call
Span-America will host an investor conference call and webcast
at 8:00 a.m. Eastern Time on Tuesday, May 2, 2017. For investors or
analysts who want to participate during the call, a live broadcast
of the conference call will be available online
at www.spanamerica.com under Investor Relations on the About
Us tab. The online replay will follow immediately and continue for
30 days.
Important additional information will be filed with the U.S.
Securities and Exchange Commission
This announcement is not a recommendation, an offer to purchase,
or a solicitation of an offer to sell shares of Span-America stock.
Savaria has not yet commenced the tender offer for shares of
Span-America stock described in this announcement. Upon
commencement of the tender offer, Savaria will file with the U.S.
Securities and Exchange Commission (SEC) a tender offer statement
on schedule TO and related exhibits, including an offer to
purchase, letter of transmittal, and other related documents.
Following commencement of the tender offer, Span-America will file
with the SEC a solicitation/recommendation statement on Schedule
14D-9. These documents will contain important information about
Savaria, Span-America, the transaction, and related matters.
Investors and security holders are urged to read each of these
documents carefully when they are available. Investors and security
holders will be able to obtain free copies of the tender offer
statement, the tender offer solicitation/recommendation statement
and other documents filed with the SEC by Savaria and Span-America
through the web site maintained by the SEC at www.sec.gov. In
addition, investors and security holders will be able to obtain
these documents by contacting the information agent named in the
tender offer materials.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the federal securities laws. Statements regarding
future events and developments and Span-America’s future
performance, as well as management’s current expectations, beliefs,
plans, estimates or projections relating to the future, are
forward-looking statements within the meaning of these laws.
Forward-looking statements are statements that do not relate
strictly to historical or current facts. These statements may
include words such as “guidance,” “anticipate,” “estimate,”
“expect,” “forecast,” “project,” “plan,” “intend,” “believe,”
“confident,” “may,” “should,” “can have,” “likely,” “future” and
other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events.
Examples of such statements in this press release include
without limitation statements regarding the planned completion of
the tender offer and the merger described above. These
forward-looking statements are subject to a number of risks and
uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such
forward-looking statements are: (a) uncertainties as to the
percentage of Span-America’s stockholders tendering their shares in
the tender offer, (b) the possibility that competing offers will be
made, (c) the possibility that various closing conditions for the
tender offer or the merger may not be satisfied or waived,
including that a governmental entity may prohibit or delay the
consummation of the merger, (d) the effects of disruption caused by
the transaction making it more difficult to maintain relationships
with employees, vendors and other business partners, (e) the risk
that stockholder or other litigation in connection with the tender
offer or the merger may result in significant costs of defense,
indemnification and liability, (f) the inability to achieve
anticipated sales growth in the medical and custom products
segments, (g) the possibility of a loss of a key customer or
distributor for our products, (h) risks related to international
operations and foreign currency exchange associated with
Span-America’s Canadian subsidiary, (i) the possibility of
having material uncollectible receivables from one or more key
customers or distributors, (j) the potential for volatile
pricing conditions in the market for polyurethane foam, (k) raw
material cost increases, (l) the possibility that some or all
of our medical products could be determined to be subject to the
2.3% medical device excise tax imposed by the Affordable Care Act,
(m) the potential for lost sales due to competition from
low-cost foreign imports, (n) changes in relationships with large
customers or key suppliers, (o) uncertainty about whether or not we
will be awarded or continue to be awarded one-time seasonal
promotions with major retailers, which can have a large impact on
annual revenues and earnings, (p) the impact of competitive
products and pricing, (q) government reimbursement changes in
the medical market, (r) FDA and Health Canada regulation of medical
device manufacturing, and (s) other risk factors detailed in
Span-America’s Annual Report on Form 10-K for the fiscal
year ended October 1, 2016 and other filings with the SEC, which
can be found at the SEC’s website www.sec.gov.
We disclaim any obligation to update publicly any
forward-looking statement, whether as a result of new information,
future events or otherwise. We are not responsible for changes made
to this document by wire services or Internet services.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170501006194/en/
Span-America Medical Systems, Inc.Jim Ferguson, 864-288-8877,
ext. 6912President and Chief Executive Officer
Span America (NASDAQ:SPAN)
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