The Cronos Group Agrees To Be Acquired For $16.00 Per Share
01 March 2007 - 11:10AM
Business Wire
The Cronos Group (Nasdaq:CRNS) announced today that it has entered
into a definitive asset purchase agreement with CRX Acquisition
Ltd. (�CRX�), a newly-formed company to be owned by certain members
of Cronos� current management team, FB Transportation Capital LLC
(�FB Transportation�) and third-party investors. Under the
agreement, CRX will purchase all of Cronos� assets and assume all
of Cronos� liabilities for a purchase price equal to $16.00 per
share, determined on a fully-diluted basis. The purchase price
totals approximately $133.7�million. In connection with the sale,
FB Transportation will purchase the majority of CRX�s owned marine
cargo container assets acquired from Cronos. CRX will manage these
assets and other marine container assets owned by third parties.
CRX will be managed by Cronos� current management team. The assets
sale and related matters are subject to approval by Cronos�
shareholders, the obtaining of certain third-party consents, and
other customary closing conditions. The acquisition is not subject
to any financing contingency. Cronos anticipates completion of the
sale during the summer of this year. The Board of Directors of
Cronos has unanimously approved the sale and recommends that
Cronos� shareholders approve the transaction at a special meeting
of shareholders to be called to consider the transaction. Dennis J.
Tietz (Chief Executive Officer and Chairman of the Board of
Cronos), Peter J. Younger (President, Chief Operating Officer, and
a director of Cronos), and S.�Nicholas Walker, a director of
Cronos, have entered into support agreements with CRX to vote their
shares (including shares owned by affiliated entities),
representing 19% of Cronos� outstanding shares, in favor of the
transaction. As noted above, certain members of Cronos� senior
management will continue as the senior management of CRX, and Peter
J. Younger will become CRX�s Chief Executive Officer. Dennis J.
Tietz, Chairman and CEO of Cronos, stated: �Cronos is pleased to
announce its agreement with CRX to sell the Company for a purchase
price equal to $16.00 per share. This transaction represents the
culmination of Cronos� efforts, begun in March 1999, when I assumed
the position of Chairman and CEO, to stabilize and grow the
Company, rationalize our debt structure, and broaden our product
lines. In March of 1999, our stock was trading at $4.79 per share.
The subsequent increase in the price of our shares reflects our
success in achieving our objectives and our shareholders�
confidence in the Company. �Cronos� return to profitability and
this transaction could not have happened without the support and
guidance of our Board of Directors, the dedication and hard work of
Cronos� employees, and the support of our lenders, suppliers and
customers.� Cronos was advised by Raymond James & Associates,
Inc. and Greene Radovsky Maloney Share & Hennigh LLP. CRX was
advised by Fortis Securities LLC and Mayer, Brown, Rowe & Maw
LLP. The Assets Sale And Proposed Liquidation Under the asset
purchase agreement, Cronos will sell all of its assets to CRX for
approximately $133.7�million in cash, and CRX will assume all of
Cronos� liabilities. CRX�s obligations under the agreement are
supported by FB Transportation and a guaranty from Fortis Bank
S.A./N.V. Cayman Islands Branch. The purchase price was negotiated
to permit a distribution to the shareholders of Cronos, in the
liquidation of Cronos, equal to $16.00 per share, without interest.
Cronos plans to file a proxy statement and a Schedule�13E-3
transaction statement with the SEC containing more detailed
information about the proposed assets sale and other elements of
the plan for the liquidation and dissolution of Cronos following
the assets sale. Following SEC review of the proxy statement and
Schedule�13E-3, Cronos will schedule the extraordinary meetings of
its shareholders required under Luxembourg law and distribute the
proxy statement. About Cronos Cronos (www.cronos.com) is one of the
world�s leading lessors of intermodal containers, owning and
managing a fleet of over 440,000 TEU (twenty-foot equivalent
units). The diversified Cronos fleet of dry cargo, refrigerated and
other specialized containers is leased to a customer base of over
450 ocean carriers and transport operators around the world. Cronos
provides container-leasing services through an integrated network
of offices using state-of-the-art information technology. About
Fortis Merchant Banking FB Transportation Capital LLC is an
affiliate of Fortis Merchant Banking. Merchant Banking is Fortis�
internationally operated wholesale bank with over 5,000
professionals. Fortis Merchant Banking provides a wide range of
financial products and services for the needs of corporate clients
and institutional investors. In the U.S., Fortis Merchant Banking
is active in global markets and banking activities, and builds on
its longstanding expertise in the energy, commodities and
transportation sectors. It has offices in New York, Stamford,
Jersey City, Denver, San Francisco, Chicago, Dallas, Houston and
Calgary. More information is available on
www.merchantbanking.fortis.com. Notice To Investors This press
release contains forward-looking statements concerning, among other
things, Cronos� future prospects, including (1)�Cronos� ability to
consummate the sale of its assets to CRX under the asset purchase
agreement; (2)�Cronos� ability to continue to manage and expand its
container leasing business pending shareholder consideration of the
asset purchase agreement and related matters; and (3)�Cronos�
ability to renew and expand its existing lines of credit for the
purchase of containers, which Cronos anticipates will be fully
drawn upon by the end of March 2007. These statements are based
upon certain assumptions that Cronos cannot control and involve
risks and uncertainties that could cause actual results to differ
from those anticipated. These statements should be understood in
light of the risk factors set forth in Cronos� filings with the
SEC, including those factors set forth in Cronos� 10-K report for
the year ended December�31, 2005, and from time to time in Cronos�
periodic filings with the SEC. Except as otherwise required under
Federal securities laws and the rules and regulations of the SEC,
Cronos does not have any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events, changes in assumptions, or otherwise.
Additional Information About The Transactions The proxy statement
referred to above will be sent to Cronos� shareholders in
anticipation of the extraordinary meetings of shareholders called
to consider the transactions contemplated by the asset purchase
agreement. Shareholders may obtain a free copy of the definitive
proxy statement and other documents filed by Cronos with the SEC,
including the Schedule�13E-3, with the SEC at the SEC�s website at
www.sec.gov, or by directing a request to Cronos as specified
above. Participants In The Transactions Cronos and its directors
and executive officers may be considered participants in the
solicitation of proxies from Cronos� shareholders in connection
with the proposed transactions. Information about the directors and
executive officers of Cronos, and their ownership of Cronos� common
shares, is set forth in the definitive proxy statement for Cronos�
2006 annual meeting of shareholders, dated April�25, 2006.
Investors may obtain additional information regarding the interests
of such participants by reading the proxy statement for the 2007
meetings of shareholders when it becomes available.
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