Hennessy Capital Acquisition Corp. II (NASDAQ:HCAC) (NASDAQ:HCACU)
(NASDAQ:HCACW) (“HCAC”) and United Subcontractors, Inc. (“USI”)
today announced that they have entered into a definitive merger
agreement, pursuant to which HCAC will acquire all of the
outstanding capital stock of USI Senior Holdings, Inc., the
indirect parent company of USI. In connection with the
merger, HCAC will change its name to USI Holdings, Inc. and
continue to list its common stock and warrants on the NASDAQ
Capital Market under the tickers “USI” and “USIW,” respectively.
USI is a leading provider of installation,
construction and distribution services to the residential and
commercial construction markets in the United States, with a
national platform consisting of 43 locations serving customers in
13 states. USI believes it is the third largest insulation
installer in the U.S. based on revenue and maintains the first or
second market position in more than 50% of its local markets based
on estimated permits issued. USI benefits by having a
national scale, long-standing vendor relationships and a diverse
customer base that includes production and custom homebuilders,
multi-family and commercial contractors and homeowners.
“HCAC is extremely pleased to introduce USI to
the public markets,” said Daniel J. Hennessy, Chairman and CEO of
HCAC. “USI is a truly differentiated building products company with
an industry-leading platform led by an exceptional management
team. We believe that the USI’s established presence in
high-growth construction markets when combined with strategic
acquisitions will lead to sustained revenue growth and
profitability for our stockholders.”
The combined company will be led by current USI
President and CEO, Bill Varner, who added, “Today is an exciting
day for USI. As a public company, we will be better
positioned to grow our product and service offerings, make
accretive acquisitions and open branches in new markets. We
are thrilled to have Dan and HCAC as partners.”
Transaction Details
Under the terms of the merger agreement dated as
of April 1, 2016 (the “Merger Agreement”), the aggregate merger
consideration is $348.5 million, subject to certain
adjustments. HCAC will pay the total merger consideration
with a combination of cash and newly issued shares of common
stock. The cash consideration will be funded through a
combination of (i) cash held in HCAC’s trust account after any
redemptions of HCAC common stock, (ii) cash raised in an
anticipated $100.0 million debt financing, and (iii) the net
proceeds, if any, received by HCAC from a potential private
placement (at HCAC’s option) of up to $35 million of HCAC’s
convertible preferred stock to one or more institutional
investors. The stock consideration will equal approximately
7.1 million shares of HCAC common stock, which will result in USI’s
stockholders owning approximately 22% of the combined company
(assuming no redemptions of HCAC common stock or purchase price
adjustments).
The Merger Agreement contemplates that the Board
of Directors of the combined company will consist of seven members:
HCAC’s CEO and Chairman Daniel J. Hennessy, who will serve as
Chairman of the Board; Bill Varner, USI’s CEO; current HCAC
directors Richard Burns, Kevin Charlton, and Peter Shea; Michael
Kestner, the former CFO of BMC Stock Holdings, Inc. (NASDAQ:STCK);
and an additional USI designee. The transaction is subject to
the satisfaction or waiver (if applicable) of customary closing
conditions, including regulatory and HCAC stockholder approvals and
the receipt of proceeds from HCAC’s anticipated debt financing, and
is expected to close promptly following HCAC’s special
stockholders’ meeting to approve the transaction. The parties
expect the transaction will be completed in the third quarter of
2016.
HCAC was advised on the transaction by UBS
Investment Bank, Cantor Fitzgerald & Co., BMO Capital Markets
and XMS Capital Partners, LLC, as financial advisors, Sidley Austin
LLP and Ellenoff Grossman & Schole LLP, as legal counsel, and
with Grant Thornton LLP providing financial due diligence
services. USI was advised by RBC Capital Markets, as
financial advisor and Willkie Farr & Gallagher LLP, as legal
counsel.
The description of the transaction contained
herein is only a summary and is qualified in its entirety by
reference to the Merger Agreement, a copy of which will be filed by
HCAC with the Securities and Exchange Commission (the “SEC”) as an
exhibit to a Current Report on Form 8-K.
Conference Call and Investor
Presentation
HCAC and USI Management will hold a
joint conference call tomorrow, April 5, 2016, to discuss the
transaction at 10:00 a.m. (Eastern Time). The conference call
can be accessed by dialing 1-877-407-9039, or for international
callers, 1-201-689-8470, and requesting to be joined to the
Hennessy Capital-USI conference call. A replay will be
available starting at 7:30 p.m. (Eastern Time) on April 5, 2016 and
can be accessed by dialing 1-877-870-5176, or for international
callers, 1-858-384-5517. The passcode for the replay is
13634449. The replay will be available until 11:59 p.m.
(Eastern Time) on April 19, 2016.
Interested investors and other parties
may also listen to a simultaneous webcast of the conference call by
logging on to HCAC’s website at www.hennessycapllc.com/hcac-ii/,
where an investor presentation has also been posted. The
online replay will remain available for a limited time beginning
immediately after the conclusion of the call.
About Hennessy Capital Acquisition Corp.
II
Hennessy Capital Acquisition Corp. II is a blank
check company founded by Daniel J. Hennessy for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with
one or more businesses. The company's acquisition and value
creation strategy is to identify, acquire and, after its initial
business combination, build an industrial manufacturing,
distribution or services business.
About USI
USI (formerly referred to as United
Subcontractors Incorporated) was founded in 1998, and is a leading
provider of installation, construction and distribution services to
the residential and commercial construction markets.
Headquartered in St. Paul, Minnesota, USI employs more than
1,800 personnel in 43 locations across 13 states. For more
information about USI, please visit USI’s website at
www.usiinc.com.
Additional Information About the
Transaction and Disclaimer
The proposed transaction will be submitted to
stockholders of HCAC for their consideration. HCAC intends to
file with the SEC preliminary and definitive proxy statements in
connection with the proposed transaction and other matters and will
mail a definitive proxy statement and other relevant documents to
its stockholders as of the record date established for voting on
the proposed transaction. HCAC’s stockholders and other
interested persons are advised to read, once available, the
preliminary proxy statement and any amendments thereto and, once
available, the definitive proxy statement, in connection with
HCAC’s solicitation of proxies for its stockholders’ meeting to be
held to approve, among other things, the proposed transaction,
because these documents will contain important information about
HCAC, USI and the proposed transaction. Stockholders may also
obtain a copy of the preliminary or definitive proxy statement,
once available, as well as other documents filed with the SEC that
will be incorporated by reference in the proxy statement, without
charge, at the SEC’s website located at www.sec.gov or by
directing a request to Nicholas A. Petruska, Executive Vice
President, Chief Financial Officer and Secretary, 700 Louisiana
Street, Suite 900, Houston, Texas, 77002, or by telephone at
(713) 300‑8242. This news release does not constitute an
offer to sell or the solicitation of an offer to buy any
securities, or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No portion of HCAC’s or USI’s websites is
incorporated by reference into or otherwise deemed to be a part of
this news release.
Participants in the
Solicitation
HCAC and its directors and executive officers
and other persons may be deemed to be participants in the
solicitations of proxies from HCAC’s stockholders in respect of the
proposed transaction. Information regarding HCAC’s directors and
executive officers is available in HCAC’s Annual Report on Form
10-K/A (the “Annual Report”), filed by HCAC with the SEC on
February 22, 2016. Additional information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests will be contained in the proxy
statement when it becomes available and which can be obtained free
of charge from the sources indicated above.
Forward-Looking Statements
This news release includes “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the United States Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by the use
of words such as “estimate,” “plan,” “project,” “forecast,”
“intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or
similar expressions other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. Such forward-looking statements with
respect to the benefits of the proposed transaction, the future
financial performance of HCAC following the proposed transaction,
changes in the market for USI’s services, and expansion plans and
opportunities, including future acquisition or additional business
combinations are based on current information and expectations,
forecasts and assumptions, and involve a number of judgments, risks
and uncertainties. Accordingly, forward‑looking statements
should not be relied upon as representing HCAC’s views as of any
subsequent date, and HCAC does not undertake any obligation to
update forward‑looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws. You should not
place undue reliance on these forward‑looking statements. As
a result of a number of known and unknown risks and uncertainties,
actual results or performance may be materially different from
those expressed or implied by these forward‑looking
statements. Some factors that could cause actual results to
differ include, but are not limited to: (1) the occurrence of any
event, change or other circumstances that could give rise to the
termination of the Merger Agreement; (2) the outcome of any legal
proceedings that may be instituted against USI or HCAC following
announcement of the proposed transaction and related transactions;
(3) the inability to complete the transactions contemplated by the
Merger Agreement due to the failure to obtain approval of the
stockholders of HCAC, consummate the anticipated debt financing or
satisfy other conditions to the closing of the proposed
transaction; (4) the ability to obtain or maintain the listing of
HCAC’s common stock on the NASDAQ Capital Market following the
proposed transaction; (5) the risk that the proposed transaction
disrupts the parties’ current plans and operations as a result of
the announcement and consummation of the transactions described
herein; (6) the ability to recognize the anticipated benefits of
the proposed transaction, which may be affected by, among other
things, competition and the ability of the combined business to
grow and manage growth profitably; (7) costs related to the
proposed transaction; (8) changes in applicable laws or
regulations; (9) the possibility that USI or HCAC may be adversely
affected by other economic, business, and/or competitive factors;
and (10) other risks and uncertainties indicated from time to time
in the proxy statement to be filed by HCAC in connection with the
proposed transaction, including those under “Risk Factors” therein,
and other factors identified in HCAC’s prior and future filings
with the SEC, available at www.sec.gov.
Contacts:
Solebury Communications Group
Jamie Lillis
+1 (203) 428-3223
jlillis@soleburyir.com
Richard Zubek
+1 (203) 428-3230
rzubek@soleburyir.com
Sources: Hennessy Capital Acquisition Corp. II
and USI.
HOUSTON, TX and ST. PAUL, MN
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