Security Capital Corporation Agrees to Sell its 91.52% Interest in its Primrose Holdings, Inc. Subsidiary
13 Februar 2006 - 2:45PM
Business Wire
Security Capital Corporation (AMEX: SCC) ("Security Capital" or the
"Company") announced today that it entered into a definitive stock
purchase agreement on February 10, 2006 to sell its 91.52% interest
(on a fully-diluted basis) in its Primrose Holdings, Inc.
("Primrose") subsidiary to an affiliate of American Capital
Strategies, Ltd. (Nasdaq: ACAS). The aggregate purchase price for
the Company's interest in Primrose and those interests in Primrose
held by minority stockholders and optionholders is $85 million,
subject to certain adjustments set forth in the agreement relating
to, among other things, payables owed to the Company and Capital
Partners, Inc., employee bonuses and transaction expenses,
resulting in a net aggregate purchase price of approximately $82.3
million. Primrose is engaged in the franchising of educational
child care centers, with related activities in real estate
consulting and site selection services in the Southeast, Southwest
and Midwest. Primrose currently is one of the Company's two
reportable segments, with the other being the employer cost
containment and health services segment that consists of WC
Holdings, Inc. As previously announced, the Company is pursuing a
formal sale process for the Company in order to seek the highest
price reasonably obtainable for the stockholders of the Company. As
also previously announced, the formal sale process could involve a
single transaction for the sale of the Company as a whole, or
separate transactions for the sale of Primrose followed by the sale
of the remainder of the Company. In the course of conducting the
formal sale process, the Company has explored both alternatives and
the Company's Board of Directors has determined that the best way
to maximize value for the Company's stockholders is to sell
Primrose and the remainder of the Company in separate transactions.
Commenting on the formal sale process, Brian D. Fitzgerald,
Chairman, President and CEO of the Company, stated that: "The sale
of Primrose represents a significant step towards completing
Security Capital's formal sale process. Together with UBS
Securities LLC, our financial advisor, we are working to finalize
the remaining aspects of the formal sale process and currently
expect to enter into a definitive agreement during the first
quarter of 2006 to sell the remainder of Security Capital." It is
expected that the Company will realize for its 91.52% interest (on
a fully-diluted basis) in Primrose approximately $76.4 million (or
approximately $11.06 per diluted share of the Company), on a
pre-tax basis, and $57.5 million (or approximately $8.33 per
diluted share of the Company), on a post-tax basis. The Company
does not currently intend to issue a special cash dividend to its
stockholders with respect to the net proceeds of the sale of
Primrose payable to it, but instead expects to retain such net
proceeds until the completion or termination of the Company's
formal sale process. The consummation of the Primrose transaction
is subject to customary closing conditions, including the
expiration of all waiting periods required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, and is expected to close by
April 15, 2006. UBS Securities LLC is the Company's financial
advisor, and Morgan, Lewis & Bockius LLP and Richards, Layton
& Finger, P.A. are the Company's legal advisors. Hill Street
Capital LLC is providing a fairness opinion in conjunction with the
sale of Primrose. The Company's two reportable segments are
employer cost containment and health services, and educational
services. The employer cost containment and health services segment
consists of WC Holdings, Inc., which provides services to employers
and their employees primarily relating to industrial health and
safety, industrial medical care, workers' compensation insurance
and the direct and indirect costs associated therewith. The
educational segment consists of Primrose. This release contains
"forward-looking" statements within the meaning of the "safe
harbor" provisions of the Private Litigation Reform Act of 1995.
Such statements are based on management's current expectations and
are subject to a number of factors and uncertainties which could
cause actual results to differ materially from those described in
the forward-looking statements. Such factors and uncertainties
include, but are not limited to: future legislative changes which
could impact the laws governing workers' compensation and medical
malpractice insurance in the various states in which the Company's
employer cost containment and health services segment operates, the
Company's ability to enhance its existing services and successfully
introduce and market new services, new service developments by the
Company's competitors, market acceptance of new services of both
the Company and its competitors, competitive pressures on prices,
the ability to attract and retain qualified personnel, interest
rates, the Company's ability to attract qualified franchisees or
access to financing for these franchisees, the effects on the
Company if a lender to one of the Company's subsidiaries utilizes
remedies available to it upon an event of default on loans at one
of the Company's subsidiaries and decisions relative to and the
outcome of the Company's formal sale process.
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