Olo said it rejected a $13/share unsolicited acquisition offer

Investing.com -- Olo Inc. (NYSE: OLO) disclosed it rejected an unsolicited $13 per share mostly stock acquisition offer from an entity referred to as "Party A" after determining the proposal did not constitute a Superior Proposal under its existing Merger Agreement with Thoma Bravo.

On July 3, Party A submitted a non-binding letter to Olo's Board proposing to acquire all outstanding shares of the company for $13.00 per share. The offer structure included 32.5% in cash and 67.5% in Party A stock, with an unspecified fixed exchange ratio. The proposal did not include an executable merger agreement.

Olo's Board met on July 7 to evaluate the offer, with management and representatives from Goldman Sachs and Goodwin in attendance. During this meeting, Goldman Sachs presented a preliminary financial evaluation of the potential transaction.

The Board identified several financial risks associated with Party A's proposal, including potential decline in Party A's stock price following announcement and closing, concerns about significant leverage Party A planned to place on the combined company, related debt service costs, and uncertainty about achieving projected revenue, EBITDA growth, and synergies.

The Board also highlighted execution risks, including limited recourse if Party A lost debt financing, stockholder exposure to Party A stock value fluctuations due to the fixed exchange ratio without floors or collars, the requirement for Party A stockholder approval, and greater regulatory risks compared to the existing Thoma Bravo agreement.

Following these discussions, Olo’s Board unanimously determined that Party A’s proposal was not, and was not reasonably expected to result in, a Superior Proposal under the Merger Agreement with Thoma Bravo. As a result, Olo informed Party A it would not engage in discussions or negotiations regarding the proposal.

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