China Fire & Security Group, Inc. (Nasdaq:CFSG) ("China Fire"
or the "Company"), a leading total solution provider of industrial
fire protection systems in China, today announced that it has
entered into a definitive merger agreement with Amber Parent
Limited ("Parent"), an affiliate of funds managed by Bain Capital
Partners, LLC ("Bain Capital"), and Amber Mergerco, Inc., a
wholly-owned subsidiary of Parent ("Merger Sub").
Under the terms of the merger agreement, each share of the
Company's common stock issued and outstanding immediately prior to
the effective time of the merger will be cancelled in exchange for
the right to receive $9.00 in cash, except for (i) shares
beneficially owned by the Company, any subsidiary of the Company,
Parent or Merger Sub, including shares to be contributed to Parent
or Merger Sub by certain special purpose companies (the "Rollover
Investors") related to Mr. Weigang Li, the Chairman of the Board,
Mr. Brian Lin, the Chief Executive Officer of the Company, and Mr.
Weishe Zhang, the Vice President of Strategic Planning of the
Company, which will be cancelled without receiving any
consideration and (ii) shares held by stockholders who have
properly exercised and perfected appraisal rights. The offer
represents a total consideration of approximately $265.5 million
(taking into account the contribution to be made by the Rollover
Investors), a 44% premium over the Company's closing price on March
4, 2011 (which represents the "undisturbed" share price prior to
the Company's announcement regarding receipt of a "going private"
proposal) and a 38% premium over the Company's 90-trading day
volume weighted average price calculated as of May 19, 2011.
The Company's Board of Directors, acting upon the unanimous
recommendation of the Special Committee formed by the Board of
Directors, approved the merger agreement and resolved to recommend
that the Company's shareholders vote to adopt the merger agreement.
The Special Committee, which comprises solely directors unrelated
to any of Parent, Merger Sub, Bain Capital or any of the management
members of the Company, negotiated the terms of the merger
agreement with the assistance of its financial and legal
advisors.
The merger, which is currently expected to close before November
15, 2011, is subject to the adoption of the merger agreement by an
affirmative vote of holders of at least 75% of the Company's
outstanding shares of common stock and an affirmative vote of
holders of more than 50% of the Company's outstanding shares of
common stock held by the disinterested shareholders of the Company,
as well as certain other customary closing conditions. Mr. Weigang
Li and certain other members of management, who collectively own a
total of 16,789,100 shares of common stock and 127,500 shares of
restricted common stock, representing 59.14% of the total voting
power of the Company, have agreed to vote to adopt the merger
agreement.
Merger Sub has entered into debt commitment letters pursuant to
which Bank of America, N.A., Citibank, N.A. and The Hongkong and
Shanghai Banking Corporation Limited as underwriters have agreed to
provide (themselves or through their affiliates) financing for the
transaction, subject to certain conditions.
The Company will schedule a meeting of its shareholders for the
purpose of voting on the adoption of the merger agreement. If
completed, the merger will, under Florida law, result in the
Company becoming a privately-held company and its shares would no
longer be listed on the Nasdaq Capital Market.
Barclays Capital is serving as the exclusive financial advisor
to the Special Committee. Shearman & Sterling LLP is serving as
U.S. legal advisor to the Special Committee and Bilzin Sumberg
Baena Price & Axelrod LLP is serving as Florida legal advisor
to the Special Committee. Bank of America Merrill Lynch, The
Hongkong and Shanghai Banking Corporation Limited and Citigroup
Global Markets Asia Limited are serving (themselves or through
their affiliates) as financial advisors to Bain Capital as well as
underwriters, bookrunners and mandated lead arrangers of the debt
facilities. Kirkland & Ellis International LLP is serving as
U.S. and U.K. legal advisor to Bain Capital. Davis Polk &
Wardwell LLP is serving as U.S. legal advisor to Barclays Capital.
Allen & Overy is serving as U.S. and U.K. legal advisor to the
underwriters, bookrunners and mandated lead arrangers. DLA Piper
and Han Kun Law Offices are serving as international and PRC
counsel to Mr. Weigang Li.
About Bain Capital
Bain Capital, LLC (www.baincapital.com) is a global private
investment firm that manages several pools of capital, including
private equity, venture capital, public equity, credit products and
absolute return, with approximately $65 billion in assets under
management. Since its inception in 1984, the firm has made
private equity investments and add-on acquisitions in more than 300
companies worldwide. Bain Capital has a distinctly
people-intensive, value-added approach to investing, with a strong
emphasis on supporting management teams to drive strategic and
operating improvements. Bain Capital Asia, the firm's Asian
private equity affiliate, has been investing with the same
philosophy since 2007. Bain Capital private equity investments
in Asia have included such leading businesses as ASIMCO,
Bellsystem24, Denon & Marantz, Domino's Japan, Feixiang, GA
Pack, GOME, Hero Investments and Lilliput. Bain Capital has
offices in Boston, Hong Kong, Shanghai, Tokyo, Mumbai, London,
Munich, Chicago, and New York.
About China Fire
China Fire & Security Group, Inc. is a leading total
solution provider of industrial fire protection systems in China.
Leveraging on its proprietary technologies, China Fire is engaged
primarily in the design, manufacturing, sales and maintenance
services of a broad product portfolio including detectors,
controllers, and fire extinguishers. The Company owns a
comprehensive portfolio of patents covering fire detection, system
control and fire extinguishing technologies, and via its nationwide
direct sales force, has built a solid client base including major
companies in iron and steel, power, petrochemical and
transportation industries throughout China. For more information
about the Company, please go to
http://www.chinafiresecurity.com.
Cautionary Statement Regarding Forward Looking
Information
This press release contains forward-looking statements relating
to the potential acquisition of the Company by an affiliate of
funds managed by Bain Capital Partners, LLC, including the expected
date of closing of the acquisition and the potential benefits of
the merger. These are "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and as defined in the U.S. Private Securities Litigation Reform Act
of 1995. The actual results of the acquisition could vary
materially as a result of a number of factors, including:
uncertainties as to how many of the Company's stockholders will
tender their stock in the offer; the possibility that competing
offers will be made; and the possibility that various closing
conditions for the transaction may not be satisfied or waived.
These forward-looking statements reflect the Company's expectations
as of the date of this press release. The Company does not
undertake any obligation to update any forward-looking statement,
except as required under applicable law.
Additional Information and Where to Find It
In connection with the proposed transaction, China Fire will
file a proxy statement with the Securities and Exchange Commission.
China Fire and its directors, executive officers and certain other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from its stockholders
in connection with the proposed transaction. Certain information
regarding the interests of such directors and executive officers is
included in the China Fire's proxy statements and Annual Reports on
Form 10-K, previously filed with the Securities and Exchange
Commission, and information concerning all of the China Fire
participants in the solicitation will be included in the proxy
statement relating to the proposed merger when it becomes
available. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors and security holders may obtain a
free copy of the proxy statement (when available) and other
documents filed by China Fire at the Securities and Exchange
Commission's website at www.sec.gov. The proxy statement and other
relevant documents may also be obtained for free from China Fire by
directing such request to Bin Gu, telephone: +86-10-8441-7400.
CONTACT: For China Fire & Security Group, Inc.
Vanessa Koo, Managing Director of Barclays Capital
(Exclusive Financial Advisor to the Special Committee)
Tel: +852-2903-2885
Email: vanessa.koo@barcap.com
Samuel Yue, Director of Barclays Capital
(Exclusive Financial Advisor to the Special Committee)
Tel: +852-2903-2886
Email: samuel.yue@barcap.com
For Bain Capital
Tong Zhao, Partner, Brunswick Group
Tel: +852 9011 8258
Email: tzhao@brunswickgroup.com
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