By Sheri Kasprzak
New York, Sept. 6 - Rand Acquisition Corp. said it has arranged a $15 million private placement of series A convertible preferred stock to partially fund the acquisitions of two private companies.
The company sold 300,000 shares of the preferreds at $50 each to Knott Partners LP and Bay Resource Partners LP.
The preferreds are initially convertible into common shares at $6.20 each. Rand may force conversion after the third anniversary of the company's acquisition, assuming its stock trades above $8.50 for 20 trading days out of 30.
The preferreds pay annual dividends at 7.75%.
Rand intends to use the funds from the private placement to partially pay for its acquisitions of Lower Lakes Towing Ltd., a Port Dover, Ont.-based bulk freight shipping services company, and Grand River Navigation Co. Grand River charters four U.S. flagged vessels to Lower Lakes Transportation Co., Lower Lakes Towing's subsidiary, for long-term charters.
The acquisition is expected to cost $53.73 million. The portion of the acquisition not funded by the private placement will be funded through a $22.5 million secured term loan and a $5.5 million senior secured revolving credit facility from GE Commercial & Industrial Finance, Inc.
The facility, which may have both Canada- and U.S.-based borrowings, has a five-year term. The Canada-based borrowings will bear interest at either the Canadian Prime rate or the Canadian 30-day banker's acceptance rate, at Rand's option. The U.S.-based borrowings will bear interest at either Prime rate plus 200 basis points or Libor plus 300 bps, also at Rand's option.
Based in New York, Rand effects mergers, business combinations and acquisitions.
| Issuer: | Rand Acquisition Corp.
|
| Issue: | Series A convertible preferred stock
|
| Amount: | $15 million
|
| Shares: | 300,000
|
| Price: | $50
|
| Dividends: | 7.75%
|
| Conversion price: | $6.20
|
| Call: | Conversion may be forced if company's stock exceeds $8.50 for 20 out of 30 consecutive trading days after the third year from the closing of the acquisition
|
| Investor: | Knott Partners LP and Bay Resource Partners LP
|
| Settlement date: | Sept. 2
|
| Stock price: | $5.24 at close Sept. 2
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
