ATLANTA, Nov. 14, 2013 /PRNewswire/ -- Innotrac
Corporation (NASDAQ: INOC) (the "Company" or "Innotrac"), a
best-of-breed commerce provider integrating digital technology,
fulfillment, and contact center solutions to support global brands,
announced today that it has entered into a definitive merger
agreement with an affiliate of Sterling Partners, providing for the
acquisition of all of the outstanding shares of Innotrac for
$8.20 per share in cash.
Scott Dorfman, the Company's CEO,
Chairman and largest shareholder, and other members of the
Company's management will continue their leadership of the Company
and will retain a significant equity position in the Company after
the transaction is closed.
The $8.20 per share purchase price
represents a 25.2% premium over the closing price of the Company's
common stock on October 21, 2013, the
last trading day prior to the beginning of the Company's exclusive
negotiations with Sterling Partners, and a 54.4% premium over the
average closing price over the 90 days ended November 14, 2013.
Under the terms of the merger agreement, an affiliate of
Sterling Partners will promptly commence a tender offer for all of
the outstanding shares of Innotrac. The agreement provides
that, promptly after the closing of the tender offer, any shares
not tendered in the tender offer will be acquired in a second-step
merger at the same cash price as paid in the tender offer.
The transaction is expected to close in the first quarter of
2014.
The merger agreement was negotiated on behalf of the Company by
a special committee of the board of directors, composed entirely of
independent directors, with the assistance of financial and legal
advisors selected by it. Following the special committee's
unanimous recommendation, Innotrac's board of directors unanimously
approved the merger agreement (with Mr. Dorfman recusing himself)
and has recommended that Innotrac's shareholders tender their
shares in the offer.
Mr. Dorfman has also entered into a contribution and support
agreement pursuant to which he has agreed to contribute all of his
shares, representing approximately 44% of the Company's outstanding
common stock, to the purchaser. It is contemplated that,
following the merger, an affiliate of Sterling Partners will
acquire a significant portion of Mr. Dorfman's equity interests at
the same cash price as paid in the tender offer. Mr.
Dorfman's obligation to contribute his shares under this support
agreement will terminate if the merger agreement terminates.
The transaction is conditioned on Innotrac shareholders
tendering at least a majority of the outstanding shares of Innotrac
common stock, and on a majority of the shares not owned by Mr.
Dorfman being tendered or voted in favor of a merger. The
transaction is also subject to other customary closing conditions,
including expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act, the
absence of a material adverse effect on the Company, and securing
required consents. There are no financing contingencies.
Following completion of the transaction, Innotrac will become a
privately held company and its stock will no longer trade on the
Nasdaq.
"This transaction will deliver to Innotrac's shareholders a
substantial cash premium, certainty of value and immediate
liquidity. We believe that Sterling will be a strong
strategic partner to help us continue to service our customers with
the best-of-breed services they have become accustomed to," said
Mr. Dorfman.
Joel Marks, the chairman of the
special committee, added, "The committee arrived at the decision to
enter into a transaction with Sterling after a thorough review of
Innotrac's future and strategic alternatives and after contact with
a wide range of potential buyers, both strategic and financial, as
part of a competitive bidding process."
The merger agreement has customary non-solicitation provisions;
however, the special committee, subject to conditions set forth in
the merger agreement, is permitted to change its recommendation to
the shareholders, and in certain circumstances terminate the merger
agreement, if it determines it has a fiduciary duty to do so,
including where there is a "superior proposal" from a third party
or as a result of material developments constituting "intervening
events," both as defined in the definitive agreement.
However, Innotrac would be required to pay a termination fee
in connection with such recommendation change in most
circumstances, and the merger agreement provides Sterling with a
customary right to match a superior proposal or to change the terms
of the merger agreement or offer in connection with intervening
events.
Harris Williams & Co. is
acting as the exclusive financial advisor to the special committee
of the board of Innotrac and provided a fairness opinion to the
special committee. Kilpatrick
Townsend & Stockton LLP is acting as legal counsel to
the special committee. Katten Muchin Rosenman LLP is acting
as legal counsel to Sterling Partners.
Additional Information About This Transaction
The tender offer contemplated in the transaction discussed in
this press release has not yet commenced. This press release
is for informational purposes only and is neither an offer to
purchase nor a solicitation of an offer to sell shares of
Innotrac. At the time the tender offer is commenced,
affiliates of Sterling will file a Tender Offer Statement on
Schedule TO containing an offer to purchase, a form of letter of
transmittal and other documents relating to the tender offer, and
the Company will file a solicitation/recommendation statement on
Schedule 14D-9 with respect to the tender offer and, if necessary,
a proxy statement regarding the subsequent merger, in each case
with the Securities and Exchange Commission (the "SEC"). The
offer to purchase shares of common stock of the Company will only
be made pursuant to the offer to purchase, the letter of
transmittal and related documents filed with the Schedule TO.
INVESTORS AND SHAREHOLDERS OF THE COMPANY ARE ADVISED TO READ
THE TENDER OFFER STATEMENT AND RELATED MATERIALS (INCLUDING THE
OFFER TO PURCHASE AND LETTER OF TRANSMITTAL), THE RELATED
SOLICITATION/RECOMMENDATION STATEMENT AND, IF NECESSARY, THE PROXY
STATEMENT AND RELATED MATERIALS, AS THEY MAY BE AMENDED AND/OR
SUPPLEMENTED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE, BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ PRIOR
TO MAKING A DECISION TO TENDER OR VOTE SHARES. Investors will
be able to obtain a free copy of these documents (when they become
available) and other documents filed by the Company and Sterling's
affiliates with the SEC at the website maintained by the SEC at
www.sec.gov. Copies of these documents can also be
obtained, without charge, by directing a request to Innotrac
Corporation, 6465 East Johns Crossing Suite 400, Johns Creek,
Georgia 30097, Attn.:
Secretary.
Innotrac and the Sterling affiliates involved in the transaction
and their respective directors and executive officers and other
members of management and employees may be deemed to be
participating in the solicitation of proxies in respect of any
future merger subject to shareholder vote. Information
regarding Innotrac's directors and executive officers is available
in Innotrac's annual report on Form 10-K for its fiscal year ended
December 31, 2012 filed with the SEC
on March 30, 2013, and in its proxy
statement for its 2013 annual meeting of shareholders filed on
April 29, 2013. Additional
information regarding the interests of such potential participants
will be included in the proxy statement relating to the merger and
the other relevant documents filed with the SEC when they become
available.
About Innotrac
Innotrac Corporation, founded in 1984 and based near
Atlanta, Georgia, is a
best-in-class commerce provider integrating digital technology,
fulfillment, contact center and business intelligence solutions to
support global brands. Innotrac's fulfillment, order
management and contact center solutions are integrated with all
major web platforms, and seamlessly integrate with any required
partner technologies. The Company employs sophisticated order
processing and warehouse management technology and operates eight
fulfillment centers and one call center spanning all time zones
across the continental United States. Innotrac Europe GmbH
has a network of fulfillment centers, call centers, and returns
processing facilities with operations in the UK, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland, Ireland, Spain and the
Netherlands. Connect with Innotrac at www.innotrac.com or
http://www.linkedin.com/company/innotrac.
About Sterling Partners L.P.
Sterling Partners, founded in 1983, is a growth-oriented,
private equity firm. Sterling manages over $5 billion in institutional capital.
Sterling's investment approach is centered on INSPIRED GROWTH™, a
philosophy of buying differentiated businesses and growing them in
inspired ways. Sterling focuses on investing growth capital
in small and mid-market companies in industries with positive,
long-term trends, including education, healthcare, and business
services. Sterling provides valuable support to the
management teams of the companies in which the firm invests through
a deep and dedicated team of operations and functional experts
based in the firm's offices in Chicago, Baltimore, and Miami.
Statements in this press release regarding the proposed
transaction between affiliates of Sterling and Innotrac, the
expected timetable for completing the transaction, the potential
benefits of the transaction, and other statements about
management's future expectations, beliefs, goals, plans or
prospects constitute forward looking statements. Innotrac has tried
to identify these forward looking statements by using words such as
"expect," "anticipate," "estimate," "plan," "will," "would,"
"should," "forecast," "believe," "guidance," "projection" or
similar expressions, but these words are not the exclusive means
for identifying such statements. Innotrac cautions that a number of
risks, uncertainties and other important factors could cause
Innotrac's actual results, performance and achievements to differ
materially from those expressed in, or implied by, the
forward-looking statements, including, without limitation,
uncertainties as to the timing of the tender offer and merger;
uncertainties as to how many Innotrac shareholders will tender
their stock in the offer; the risk that competing offers will be
made; the possibility that various closing conditions for the
transaction may not be satisfied or waived, including that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the transaction; any conditions imposed by
governmental or regulatory authorities in connection with
consummation of the tender offer and the merger; satisfaction of
various other conditions to the completion of the tender offer and
the merger contemplated by the merger agreement; the risk that
affiliates of Sterling will not perform their obligations under the
merger agreement; and the risk factors set forth from time to time
in Innotrac's SEC filings, including the disclosures under "Risk
Factors" in those filings. Except as expressly required by the
federal securities laws, Innotrac undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, changed circumstances or future events
or for any other reason.
Contact
Steve
Keaveney
Chief Financial Officer
678-584-4020
skeaveney@innotrac.com
SOURCE Innotrac Corporation
