Quality Distribution (QLTY) Completes $81.5M Acquisition of RM Resources; Could Pay $19M on Performance Achievements
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Quality Distribution, Inc. (Nasdaq: QLTY) has completed its previously announced acquisition of the operating assets and rights of RM Resources, LLC ("RM"). Together with the previously announced closing of the acquisition of certain operating assets of Wylie Bice Trucking, LLC ("Bice") on June 1, 2012, the aggregate purchase price for the combined businesses is approximately $81.5 million plus potential additional consideration of $19.0 million if certain future operating and financial performance criteria are satisfied. The increased purchase price was primarily due to new revenue producing assets purchased after the initial valuation date. Quality utilized borrowings under its asset-based credit facility to finance the cash portion of these transactions.
The transactions were structured as asset acquisitions, with aggregate consideration paid to the sellers as follows: (i) approximately $52.2 million in cash; (ii) a total of $21.3 million in 5-year subordinated seller notes bearing interest at a 5% fixed rate; and (iii) $8.0 million in unregistered restricted shares of Quality common stock. Up to an additional $19.0 million may be payable in cash one year after the closing date, contingent upon the collective businesses meeting certain future operating and financial performance criteria.
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The transactions were structured as asset acquisitions, with aggregate consideration paid to the sellers as follows: (i) approximately $52.2 million in cash; (ii) a total of $21.3 million in 5-year subordinated seller notes bearing interest at a 5% fixed rate; and (iii) $8.0 million in unregistered restricted shares of Quality common stock. Up to an additional $19.0 million may be payable in cash one year after the closing date, contingent upon the collective businesses meeting certain future operating and financial performance criteria.
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