- Target Hospitality Board Disbands Special
Committee -
- Target Hospitality to Reinvigorate Focus on
Allocating Capital to High Return Initiatives, Including In-Organic
Growth -
- Reaffirms 2024 Outlook Given Strength of
Year-to-Date Operating Results -
THE
WOODLANDS, Texas, Sept. 25,
2024 /PRNewswire/ -- Target Hospitality Corp.
("Target Hospitality," "Target" or the "Company") (Nasdaq: TH), one
of North America's largest
providers of vertically integrated modular accommodations and
value-added hospitality services, today announced that the
Company's Board of Directors has determined to disband the Special
Committee of the Company's Board of Directors (the "Special
Committee"), comprised solely of independent directors, which it
had established to consider and evaluate the previously announced
unsolicited non-binding offer, received on March 24, 2024, from Arrow Holdings S.à r.l.
("Arrow"), an affiliate of TDR Capital LLP ("TDR"), to acquire all
of the outstanding shares of common stock of the Company not owned
by Arrow, any investment fund managed by TDR or their respective
affiliates (the "Unaffiliated Shares"), for cash consideration of
$10.80 per share (the "TDR Offer")
and explore and consider strategic alternatives thereto. In
connection with its review of the TDR Offer, the Special
Committee launched a formal process to solicit offers for the
Company and invited Arrow to participate in such a process.
Following the previously announced loss of a contract, no formal
offers were received, and Arrow did not reaffirm the TDR Offer
or advance any alternative proposal that the Special Committee
could conclude, in consultation with its independent financial and
legal advisors, would be more attractive to the holders of the
Unaffiliated Shares than the Company's standalone prospects. The
Company cannot predict what Arrow, TDR or others will do in
the future regarding a potential acquisition of the Company.
The Company will continue to focus on allocating capital to high
return initiatives, including in-organic growth. Given the
operating results to date, the Company is reaffirming its 2024
guidance outlook.
Brad Archer, President and Chief
Executive Officer commented, "Our underlying business fundamentals
remain strong, and the Company continues to perform well,
capitalizing on healthy demand for our services and our efficient
operating platform. Our team remains focused on driving the
business forward, supported by a solid balance sheet, strong
liquidity profile, good revenue visibility and robust cash
generation. The conclusion of the evaluation process of
the TDR Offer restores our full flexibility to pursue multiple
capital allocation opportunities focused on maximizing value. Based
on all these favorable dynamics, we are pleased to reaffirm our
2024 outlook."
Target will reinvigorate its efforts to maximize value creation
while maintaining its strong financial position through disciplined
capital deployment. The Company has continued its efforts to build
and evaluate a pipeline of strategic growth opportunities in the
coming years. These opportunities encompass Target's existing
full-turnkey hospitality solutions, as well as broaden Target's
value chain participation through individual elements of existing
core competencies.
About Target Hospitality
Target Hospitality is one of North
America's largest providers of vertically integrated modular
accommodations and value-added hospitality services in the United States. Target builds, owns and
operates a customized and growing network of communities for a
range of end users through a full suite of value-added solutions
including premium food service management, concierge, laundry,
logistics, security and recreational facilities services.
Cautionary Statement Regarding Forward Looking
Statements
Certain statements made in this press release (including the
financial outlook) are "forward looking statements" within the
meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words "estimates," "projected," "expects,"
"anticipates," "forecasts," "plans," "intends," "believes,"
"seeks," "may," "will," "should," "future," "propose" and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
our control, that could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or
outcomes include: operational, economic, including inflation,
political and regulatory risks; our ability to effectively compete
in the specialty rental accommodations and hospitality services
industry, including growing the HFS – South and Government
segments; effective management of our communities; natural
disasters and other business distributions including outbreaks of
epidemic or pandemic disease; the duration of any future public
health crisis, related economic repercussions and the resulting
negative impact to global economic demand; the effect of changes in
state building codes on marketing our buildings; changes in demand
within a number of key industry end-markets and geographic regions;
changes in end-market demand requirements including variable
occupancy levels associated with subcontracts in the Government
segment; our reliance on third party manufacturers and suppliers;
failure to retain key personnel; increases in raw material and
labor costs; the effect of impairment charges on our operating
results; our future operating results fluctuating, failing to match
performance or to meet expectations; our exposure to various
possible claims and the potential inadequacy of our insurance;
unanticipated changes in our tax obligations; our obligations under
various laws and regulations; the effect of litigation, judgments,
orders, regulatory or customer bankruptcy proceedings on our
business; our ability to successfully acquire and integrate new
operations; global or local economic and political movements,
including any changes in policy under the Biden administration or
any future administration; federal government budgeting and
appropriations; our ability to effectively manage our credit risk
and collect on our accounts receivable; our ability to fulfill
Target Hospitality's public company obligations; any failure of our
management information systems; our ability to refinance debt
on favorable terms and meet our debt service requirements and
obligations; and risks related to our outstanding obligations in
connection with the Senior Notes. We undertake no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Investor Contact
Mark
Schuck
ir@targethospitality.com
(832) 702 – 8009
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SOURCE Target Hospitality