Liquidity (LQDT) to Acquire Jacobs Trading Remarketing Biz for $140M
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Liquidity Services, Inc. (Nasdaq: LQDT), has agreed to acquire the consumer goods remarketing business of Jacobs Trading Company (Jacobs Trading) for $140 million plus potential performance-based consideration.
The acquisition, which will be financed with a combination of cash, a seller note and Liquidity Services common stock, is expected to close in Q112.
Terms of the deal include upfront consideration of $140 million, consisting of $80 million in cash, $40 million in a seller promissory note and $20 million in Liquidity Services’ common stock, based on the average closing price during the 10 trading days prior to the executed definitive purchase agreement. The transaction also includes additional contingent earn-out payments of up to an aggregate of $30 million based on Jacobs Trading’s EBITDA results for calendar year 2012 and calendar year 2013. Jacobs Trading selling stockholders may elect to receive any earn-out amounts due in either: (i) all cash, or (ii) up to 50% in Liquidity Services’ stock and the remainder in cash. Any stock elected to be taken by Jacobs Trading selling stockholders pursuant to an earn-out shall be valued based on the average closing price of Liquidity Services’ common stock during the 10 trading days prior to the end of the earn-out period, December 31, 2012 and December 31, 2013. RBC Capital Markets LLC provided Liquidity Services with a fairness opinion related to the transaction.
Liquidity Services expects the transaction to add 28 to 33 cents per cash-based diluted earnings per share to its fiscal 2012 results, excluding one-time deal expenses and amortization of deal related intangible assets which have not yet been determined, and assuming an October 1, 2011 closing date.
The acquisition, which will be financed with a combination of cash, a seller note and Liquidity Services common stock, is expected to close in Q112.
Terms of the deal include upfront consideration of $140 million, consisting of $80 million in cash, $40 million in a seller promissory note and $20 million in Liquidity Services’ common stock, based on the average closing price during the 10 trading days prior to the executed definitive purchase agreement. The transaction also includes additional contingent earn-out payments of up to an aggregate of $30 million based on Jacobs Trading’s EBITDA results for calendar year 2012 and calendar year 2013. Jacobs Trading selling stockholders may elect to receive any earn-out amounts due in either: (i) all cash, or (ii) up to 50% in Liquidity Services’ stock and the remainder in cash. Any stock elected to be taken by Jacobs Trading selling stockholders pursuant to an earn-out shall be valued based on the average closing price of Liquidity Services’ common stock during the 10 trading days prior to the end of the earn-out period, December 31, 2012 and December 31, 2013. RBC Capital Markets LLC provided Liquidity Services with a fairness opinion related to the transaction.
Liquidity Services expects the transaction to add 28 to 33 cents per cash-based diluted earnings per share to its fiscal 2012 results, excluding one-time deal expenses and amortization of deal related intangible assets which have not yet been determined, and assuming an October 1, 2011 closing date.
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