Agilysys begins self-tender offer for 6 million shares

By Lisa Kerner

Charlotte, N.C., Aug. 21 - Agilysys, Inc. began a Dutch auction tender offer for up to 6 million of its common shares priced from $16.25 to $18.50 each. Management and directors are not expected to tender shares in the offer, which ends at 5 p.m. ET on Sept. 19.

Agilysys expects to use about $100 million of its $250 million cash on hand to fund the purchase. The company reportedly has no debt and $200 million available for borrowings under its credit facility.

The board of directors authorized Agilysys to repurchase up to an additional 2 million shares in the open market at or below $18.50 each for a one-year period following the expiration of the tender offer if the offer does not exceed $150 million.

Agilysys plans to continue to pay its $0.03-per-share quarterly dividend.

"The self-tender and supplementary open market authorization is a strong signal from our board and management that we are confident in our strategy to reposition the company and focus on selling IT solutions," chairman, president and chief executive officer Arthur Rhein said in a company news release.

"Tendering shareholders will receive an immediate premium to the stock's closing price of $15.63 on August 20, as it stood prior to the tender, and non-tendering shareholders, along with management and directors, will increase their pro rata ownership in the company and our future operations."

J.P. Morgan Securities Inc. is the dealer manager for the tender offer, and the information agent is Georgeson Inc. National City Bank is the depositary.

Over the past seven months, the Boca Raton, Fla., IT solutions provider closed four strategic acquisitions and increased pro forma revenues by over 70%, Rhein added.

"We are now focused on leveraging the 'new' Agilysys to deliver sustained growth and profitability and will continue on our strategic course of enhancing the value we provide to our customers and shareholders," Rhein said.

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