Värde Partners to Acquire FirstCity (FCFC) for $10/Share
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FirstCity Financial Corporation (NASDAQ: FCFC) and Värde Partners, Inc. (“Värde”) announced today that they have entered into a definitive merger agreement under which certain funds managed by Värde will acquire FirstCity. Under the terms of the merger agreement, FirstCity stockholders will receive $10.00 per share in cash for each share of FirstCity stock they own. The transaction is valued at $224.9 million, including debt.
The $10.00 per share consideration represents a 20.5% premium to the closing price of FirstCity’s shares on December 20, 2012, and a 22.8% premium to the 30-day average closing price of $8.14. The transaction is expected to close in the first half of 2013.
Värde and certain of its affiliates have worked with FirstCity since 1993 and have co-invested in a substantial majority of FirstCity’s U.S. distressed asset acquisitions since 2009. Over the past several years, Värde and FirstCity have jointly invested over $800 million to purchase distressed assets with an unpaid principal balance of over $1.4 billion.
Upon closing of the transaction, Mr. Sartain (64), intends to retire from FirstCity, and will join Värde as a consultant. Following the closing of the merger, Mark B. Horrell, Senior Vice President and FirstCity’s Head of U.S. Acquisitions, will serve as Chief Executive Officer. Additionally, Terry R. DeWitt, Senior Vice President and FirstCity’s Head of Global Acquisitions, and James C. Holmes, Senior Vice President and Managing Director of FirstCity, will become Chief Credit Officer and Chief Operations Officer, respectively, and will assist Mr. Horrell in leading the operations of the Company following the closing of the transaction. FirstCity will retain its headquarters in Waco and will maintain its office in Dallas, Texas.
The transaction is subject to the approval of FirstCity stockholders, antitrust clearances and other customary closing conditions. Värde will not be obtaining debt financing for this transaction.
Haynes and Boone, LLP is serving as legal counsel and Lazard Middle Market LLC is serving as financial advisor to FirstCity in connection with the transaction. Morris, Nichols, Arsht & Tunnell LLP is serving as Delaware legal counsel to FirstCity’s Board of Directors. Mayer Brown LLP is serving as Värde’s legal counsel and Sandler O’Neill + Partners, L.P. is serving as its financial advisor.
The $10.00 per share consideration represents a 20.5% premium to the closing price of FirstCity’s shares on December 20, 2012, and a 22.8% premium to the 30-day average closing price of $8.14. The transaction is expected to close in the first half of 2013.
Värde and certain of its affiliates have worked with FirstCity since 1993 and have co-invested in a substantial majority of FirstCity’s U.S. distressed asset acquisitions since 2009. Over the past several years, Värde and FirstCity have jointly invested over $800 million to purchase distressed assets with an unpaid principal balance of over $1.4 billion.
Upon closing of the transaction, Mr. Sartain (64), intends to retire from FirstCity, and will join Värde as a consultant. Following the closing of the merger, Mark B. Horrell, Senior Vice President and FirstCity’s Head of U.S. Acquisitions, will serve as Chief Executive Officer. Additionally, Terry R. DeWitt, Senior Vice President and FirstCity’s Head of Global Acquisitions, and James C. Holmes, Senior Vice President and Managing Director of FirstCity, will become Chief Credit Officer and Chief Operations Officer, respectively, and will assist Mr. Horrell in leading the operations of the Company following the closing of the transaction. FirstCity will retain its headquarters in Waco and will maintain its office in Dallas, Texas.
The transaction is subject to the approval of FirstCity stockholders, antitrust clearances and other customary closing conditions. Värde will not be obtaining debt financing for this transaction.
Haynes and Boone, LLP is serving as legal counsel and Lazard Middle Market LLC is serving as financial advisor to FirstCity in connection with the transaction. Morris, Nichols, Arsht & Tunnell LLP is serving as Delaware legal counsel to FirstCity’s Board of Directors. Mayer Brown LLP is serving as Värde’s legal counsel and Sandler O’Neill + Partners, L.P. is serving as its financial advisor.
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