By Lisa Kerner
Charlotte, N.C., May 24 - CEVA Group plc, owned by Apollo Management VI, LP, will acquire EGL, Inc. for $47.50 per share in a transaction valued at about $2 billion, according to a definitive agreement signed on Thursday. The agreement includes a $20 million termination fee.
EGL's board of directors approved the agreement and will recommend that EGL's shareholders do the same. The transaction is expected to close in the third quarter.
As a result, EGL has terminated its previous merger agreement with its largest shareholder and chief executive officer James R. Crane and his affiliates including Centerbridge Partners, LP and the Woodbridge Co., Ltd.
EGL has paid a $30 million fee to the Crane group in connection with the termination.
CEVA's purchase price is a 25% premium over the $38.00 per share offered by Crane originally. Crane's group upped its offer price on May 18 to $46.25.
"After careful consideration, our special committee has concluded that this transaction is in the best interest of EGL and maximizes value for all of our shareholders," chairman of the special committee Milton Carroll said in a company news release.
"We are very excited to have many of the senior leadership at EGL join CEVA as our partners and look forward to working together to build the leading transportation logistics provider in the world," CEVA chief executive officer Dave Kulik added.
CEVA expects all existing operations at EGL will remain unchanged at its existing location in Houston.
"Our effort to acquire EGL has been a lengthy process, and we are pleased that the board's special committee and disinterested directors have unanimously approved our transaction," a CEVA news release stated. The company was disappointed, however, with Crane's remarks regarding the role of EGL's president E. Joseph Bento in the sale process, calling Crane's allegations untruthful with no basis in fact.
Crane accused Bento of purporting to cooperate with the Crane Group while in fact secretly and improperly cooperating with Apollo Management and CEVA, according to a schedule 13D filing with the Securities and Exchange Commission.
Specifically, Crane believes Bento "improperly shared confidential information relating to the reporting persons bidding strategy and other confidential information." As a result, Crane's group intends to explore all appropriate remedies, including legal action for damages and other relief, the filing stated.
EGL is a global transportation, supply chain management and information services company.
CEVA (formally known as TNT Logistics) is a Hoofddorp, Netherlands-based logistics and supply chain management company.
| Acquirer: | CEVA Group plc
|
| Target: | EGL, Inc.
|
| Transaction value: | $2 billion
|
| Price per share: | $47.50
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| Announcement date: | May 24
|
| Termination fee: | $20 million
|
| Expected closing: | Third quarter
|
| Stock price for target: | Nasdaq: EAGL: $46.64 on May 23
|
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