Synutra Int'l (SYUT) Enters 'Going Private' Deal with Beams Power

November 17, 2016 4:02 PM EST

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Synutra International, Inc. (Nasdaq: SYUT) announced it has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Beams Power Investment Limited, a company with limited liability incorporated under the laws of the British Virgin Islands ("Parent"), and Beams Power Merger Sub Limited, a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent (the "Merger"). Parent currently beneficially owns approximately 63.5% of the Company's outstanding shares of common stock, $0.0001 par value per share (the "Company Common Stock"). Ms. Xiuqing Meng, spouse of Mr. Liang Zhang, is the sole shareholder of Parent. Mr. Liang Zhang is the chairman and chief executive officer of the Company.

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each share of Company Common Stock issued and outstanding immediately prior to such effective time (other than (i) the shares held by (a) Parent, Merger Sub and any other direct or indirect subsidiary of Parent and (b) the Company and (ii) the shares in respect of which appraisal rights have been properly and validly exercised under Delaware law) will be automatically canceled and converted into the right to receive $6.05 in cash (the "Merger Consideration"), without interest. The Merger Consideration represents a 58% premium over the closing price of the Company Common Stock as quoted by NASDAQ Global Select Market (the "NASDAQ") on January 14, 2016, and a premium of 31% and 20%, respectively, over the Company's 30- and 60-trading day volume-weighted average price as quoted by the NASDAQ prior to January 14, 2016, the last trading day prior to the Company's announcement on January 15, 2016 that it had received a non-binding "going private" proposal.

Parent has secured a committed loan facility from Shanghai Pudong Development Bank Co., Ltd. to finance the transactions contemplated by the Merger Agreement, including the Merger.

The Company's board of directors, acting upon the unanimous recommendation of the special committee formed by the board of directors (the "Special Committee"), unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and resolved to recommend that the Company's stockholders adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. The Special Committee, which is composed solely of independent directors of the Company who are unaffiliated with Parent, Merger Sub or management of the Company, exclusively negotiated the terms of the Merger Agreement with the buyer group consisting of Mr. Liang Zhang, Ms. Xiuqing Meng, Parent and Merger Sub, with the assistance of its independent financial and legal advisors.

The Merger is subject to stockholder approval as well as certain other customary closing conditions. Pursuant to the Merger Agreement, adoption of the Merger Agreement by the Company's stockholders requires the affirmative vote of (i) the holders of at least a majority of the Company Common Stock and (ii) the holders of at least a majority of the Company Common Stock other than the shares of Company Common Stock held by (a) Parent, Merger Sub and any other direct or indirect subsidiary of Parent and (b) the Company. The Company will call a meeting of stockholders for the purpose of voting on the adoption of the Merger Agreement as soon as practicable. If completed, the Merger will, under laws of the State of Delaware, result in the Company becoming a privately-held company and the Company Common Stock would no longer be listed on the NASDAQ.

Houlihan Lokey Capital, Inc. is serving as the financial advisor to the Special Committee, Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal counsel to the Special Committee, and Potter Anderson & Corroon LLP is serving as Delaware legal counsel to the Special Committee. Wilson Sonsini Goodrich & Rosati is serving as U.S. and Delaware legal counsel to the Company.

Davis Polk & Wardwell LLP is serving as U.S. legal counsel to the buyer group.



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