Watsco to Acquire ACR Group, Inc.
July 05 2007 - 7:00AM
Business Wire
Watsco, Inc. (NYSE:WSO) and ACR Group, Inc. (AMEX:BRR) today
announced that they have executed a definitive merger agreement
under which Watsco will seek to acquire ACR�s outstanding common
stock in a cash tender offer of $6.75 per share. With annual sales
of $240 million in its most recent fiscal year, ACR is one of the
nation�s largest distributors of air conditioning and heating
products. Founded in 1990, ACR is based in Houston, Texas and
operates from 54 locations serving over 12,000 air conditioning and
heating contractors throughout Florida, Texas, California, Georgia,
Tennessee, Arizona, Colorado, Louisiana, Nevada and New Mexico. ACR
has 503 employees and distributes a full line of air conditioning
and heating equipment and related parts and supplies consisting of
approximately 20,000 SKUs. ACR ranked #7 in Supply House Times
magazine�s 2007 list of the top 50 HVAC distributors in the United
States. Additional information about ACR may be found on the
Internet at www.acrgroup.com. ACR trades on the American Stock
Exchange under the symbol �BRR�. Albert Nahmad, Watsco�s President
and CEO, commented, �We are very pleased to welcome ACR�s employees
to the Watsco family. We recognize that ACR�s success over the
years is based on the strong relationships this organization has
built with HVAC contractors who want the very best service and a
broad range of products available at convenient locations. ACR will
operate as a subsidiary of Watsco under its present name and superb
management team and Watsco will provide resources where needed to
assist with ACR�s growth plans.� Alex Trevino, Jr., ACR�s Chairman
and CEO, stated, �Watsco is the recognized leader in the HVAC
distribution industry. Al Nahmad has done a phenomenal job building
Watsco to its present size, and we are pleased to add ACR to the
stable of fine companies that comprise the Watsco family. Watsco�s
culture of allowing its business units to operate relatively
autonomously while providing support as needed to foster growth is
synonymous with the business model that we developed at ACR. With
the resources of Watsco supporting us, our employees should
continue to thrive and sustain the dynamic growth rate that has
characterized our company in recent years.� Watsco has agreed in
the merger agreement to commence a tender offer for ACR�s
outstanding common stock as soon as practicable at a price of $6.75
per share, a 42% premium to the ninety-day average closing price.
ACR�s board of directors has unanimously recommended that ACR�s
shareholders tender their shares in the offer. Executive officers
of ACR and their affiliates have agreed to support this transaction
and to sell shares representing approximately 26% of ACR�s
outstanding shares to Watsco for $6.75 per share. The completion of
the tender is conditioned upon the number of tendered ACR shares
and the shares purchased under the officers� support agreements
being at least 66 2/3% of the outstanding ACR�s outstanding shares,
as well as regulatory approvals and other customary closing
requirements. Watsco reasonably believes it will obtain the
necessary financing for the transaction and expects to close the
merger transaction in August 2007. Houlihan Lokey Howard &
Zukin is acting as financial advisor to ACR and has rendered a
fairness opinion to its Board of Directors with respect to the
tender offer and merger. Watsco is the largest independent
distributor of air conditioning, heating and refrigeration
equipment and related parts and supplies in the HVAC industry,
currently operating 385 locations serving over 40,000 customers in
32 states. Watsco�s goal is to build a national network of
locations that provide the finest service and product availability
for HVAC contractors, assisting and supporting them as they serve
the country�s homeowners and businesses. Additional information
about Watsco may be found on the Internet at http://www.watsco.com.
Important Information The tender offer described in this press
release has not yet commenced. This press release is for
informational purposes only and is not an offer to buy or the
solicitation of an offer to sell any securities. The solicitation
and the offer to buy shares of ACR�s common stock will only be made
pursuant to an offer to purchase and related materials that Watsco
intends to file with the Securities and Exchange Commission when
the tender offer is commenced. ACR will file a
solicitation/recommendation statement with respect to the offer.
ACR shareholders should read all such materials carefully when they
become available before making any decisions with respect to the
offer because they will contain important information, including
the terms and conditions of the offer. When the offer is commenced,
the materials will be available free of charge at the SEC�s website
at www.sec.gov or from Watsco at 2665 S. Bayshore Drive, Suite 901,
Miami, FL 33133 or by emailing your request to blogan@watsco.com.
This document contains �forward-looking� statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on management�s current expectations and
are subject to uncertainty and changes in circumstances. Actual
results may differ materially from these expectations due to
changes in economic, business, competitive market, regulatory and
other factors, including, without limitation, the effects of
supplier concentration, competitive conditions within Watsco�s and
ACR�s industry, the seasonal nature of sales of Watsco�s and ACR�s
products and other risks. Forward-looking statements speak only as
of the date the statement was made. Neither Watsco nor ACR assumes
any obligation to update forward-looking information to reflect
actual results, changes in assumptions or changes in other factors
affecting forward-looking information. Detailed information about
these factors and additional important factors can be found in the
documents that Watsco and ACR file from time to time with the
Securities & Exchange Commission, such as Form 10-K, Form 10-Q
and Form 8-K.
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