School Specialty has agreed to be taken over by an affiliate of private investment firm Bain Capital Partners for about $1.5 billion including debt.
The deal includes a $49 per share cash offer for 22.9 million existing shares. Bain will also acquire non-convertible debt of about $101 million.
David Vander Zanden will continue as president/CEO after completion of the deal, which is expected in School Specialty’s fiscal Q2 ending 29 October, the company announced.
In the wake of the announcement, School Specialty has been named as a defendant in two putative shareholder class actions that were filed in Outagamie County.
The complaints allege that the company breached fiduciary duties to its shareholders by negotiating a transaction price that the plaintiffs consider inadequate. School Specialty said it does not believe the claims have merit and intends to vigorously contest them.
School Speciality has also reported a wider loss for Q3, due to one-time charges and a seasonally slow period for school products.
It reported a loss of $8.4 million, or $0.37 per share, compared with a smaller loss of $6.1 million, or $0.32 per share, a year earlier. Q3 revenue totalled $175.2 million, an increase of 9 per cent on a year earlier and higher than analyst estimates of $169.8 million.