School Specialty and LBW Holdings have announced the mutual termination of their merger agreement, dated 31 May 2005.
In July, the OP reseller had agreed to be taken over by LBW Holdings, an affiliate of Bain Capital Partners, for about $1.5 billion including debt. The deal was expected to close in School Specialty’s Q2, ending 29 October, but started to look unlikely when three of LBW’s banks pulled out of the agreement at the beginning of October due to concerns over disappointing results in August and September and its near-term financial and operating prospects.
President/CEO of School Specialty David Vander Zanden, who was to continue in the same position after the deal’s completion, claims there are good and bad things about the outcome. "It is easier to run a company with a debt of $400 million than a company with a debt of $1.2 billion," he told OPI. But he added that Bain is very professional and that School Specialty will miss out from this input at the helm.
No termination fees arose and each party will cover the cost of its own merger-related expenses, which School Specialty estimate to be $5-$6 million.
