Notable Mergers and Acquisitions of the Day 05/13: (FRME)/(CITX) (ATK) (TGX) (ASIA)

May 13, 2013 10:13 AM EDT
* First Merchants Corporation (Nasdaq: FRME) and CFS Bancorp, Inc. (Nasdaq: CITZ) executed a definitive agreement whereby CFS will merge with and into First Merchants, and its wholly-owned bank subsidiary, Citizens Financial Bank, will merge with and into First Merchants Bank, NA.

The merger agreement provides that shareholders of CFS will have the right to receive 0.65 shares of First Merchants common stock for each share of CFS common stock owned. Based on the closing price of First Merchants' common stock on May 10, 2013 of $16.14, the transaction value is approximately $114.7 million, with an implied price per share of CFS common stock of $10.49.

The transaction is expected to be completed in the fourth quarter of 2013, subject to the affirmative vote of CFS and First Merchants shareholders, regulatory approvals, and other customary conditions. The combined company, doing business as First Merchants Bank expects to complete its integration during the first quarter of 2014.

First Merchants and CFS will have combined assets of $5.4 billion and create the second largest financial holding company headquartered in Indiana. The combined company will have nearly 100 banking offices in twenty-six Indiana counties, as well as two counties in both Ohio and Illinois.

Sandler O\'Neill& Partners, L.P. served as financial advisor to First Merchants and rendered a fairness opinion to the company's board of directors in this transaction. First Merchants legal advisor was Bingham Greenebaum Doll LLP.

River Branch Capital LLC served as financial advisor to CFS and rendered a fairness opinion to the company's board of directors in this transaction. Vedder Price P.C. served as legal advisor to CFS.

* Theragenics Corporation (NYSE: TGX) announced that its Board of Directors has received a proposal from Juniper Investment Company, LLC (“Juniper”) to acquire all of the Company’s outstanding common stock for $2.25 to $2.30 per share in cash. The Company has entered into an agreement (“Letter Agreement”) dated May 12, 2013 to deal and negotiate exclusively with Juniper through June 11, 2013 regarding a merger transaction. During this period, the Company has agreed not to initiate, solicit, negotiate, discuss or enter into an agreement with or provide any information to any third party with respect to any alternative business combination. The $2.25 to $2.30 per share range in the Letter Agreement reflects a negotiated increase from a $2.05 to $2.10 per share range Juniper initially proposed in its letter dated May 10, 2013 to the Company.

The Letter Agreement is subject to, among other things, satisfactory completion of Juniper’s due diligence review of the Company, the receipt of financing by Juniper and the negotiation and execution of a mutually acceptable definitive merger agreement containing customary terms and conditions. The Letter Agreement provides that Juniper expects any definitive merger agreement between the Company and Juniper would contain an appropriate "go shop" provision allowing the Company, for a period of 30 days from the date of execution of a definitive merger agreement, the ability to solicit interest from third parties in connection with an alternative business combination.

No final decision has been made to engage in a merger transaction or similar business combination with Juniper or any other party. The Board continues to evaluate strategic alternatives, including Juniper’s proposal, consistent with its fiduciary duties to act in the best interest of the Company’s stockholders. There can be no assurance that any definitive merger agreement will be entered into or, if entered into, what the terms thereof will be, or that this or any other transaction will be approved or consummated. The Company does not intend to comment further regarding this proposal or its evaluation of strategic alternatives unless a specific transaction is recommended by the Board.

The Company is being advised in this process by its financial advisor, VRA Partners, and its legal advisor, Bryan Cave LLP.

* AsiaInfo-Linkage, Inc. (NASDAQ: ASIA) and CITIC Capital Partners, the private equity arm of CITIC Capital Holdings Ltd. announced today the signing of a definitive merger agreement under which AsiaInfo-Linkage will be acquired by a private investor consortium led by CITIC Capital Partners.

Under the terms of the merger agreement, upon completion of the acquisition the stockholders of AsiaInfo-Linkage will receive US$12.00 in cash for each AsiaInfo-Linkage share of common stock they hold. This per share price values AsiaInfo-Linkage at approximately US$890 million, represents a 52% premium over the closing price on January 11, 2012, the last trading day prior to AsiaInfo-Linkage's receipt of a "going private" proposal from CITIC Capital Partners, and represents a 53% premium over the 30-trading day volume weighted average price as of the same date.

* ATK (NYSE: ATK) announced it has entered into an agreement to acquire Caliber Company, the parent company of Savage Sports Corporation. Savage is one of the world's largest manufacturers of hunting rifles and shotguns, delivering innovative products for more than 100 years. The acquisition would expand ATK's portfolio offering by adding long guns to its leading brands in commercial and security ammunition, shooting sports and security-related accessories. The transaction is subject to regulatory approvals and customary closing conditions. ATK anticipates closing the transaction in the first quarter of its Fiscal Year 2014 (FY14), which ends June 30, 2013.

Under the terms of the transaction, ATK will pay $315 million in cash, subject to a customary working capital adjustment. This represents a trailing twelve months ended March 31, 2013 EBITDA multiple of approximately 5.5 times (unaudited). ATK believes the acquisition will be accretive to FY14 earnings per share. ATK will finance the acquisition with cash on hand and funds available under its existing credit facility.

ATK will integrate Savage within its Sporting Group business. ATK's Sporting Group is the established leader in sporting and law enforcement ammunition and shooting accessories. ATK's ammunition brands include Federal Premium, CCI, Fusion, Speer, Estate Cartridge and Blazer. ATK's accessories brands include BLACKHAWK!, Alliant Power, RCBS, Champion targets and shooting equipment, Gunslick Pro and Outers gun-care products, and Weaver optics and mounting systems.

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