National Research Corporation Adopts Class B Reverse Stock Split to Eliminate Public Trading of Class B Common Stock
18 September 2017 - 9:00PM
National Research Corporation (NASDAQ:NRCIA) (NASDAQ:NRCIB) today
announced that its Board of Directors unanimously approved a
reverse stock split (and subsequent forward stock split) that will
cash out all holders of the Company's class B common stock, other
than Michael Hays, the Company's chief executive officer. The class
B common stock will cease trading and be delisted. The transaction
is designed to address shareholder concerns with public market
trading confusion related to the Company’s two classes of common
stock (the class A common stock and class B common stock) and to
provide a timely and cost-effective liquidity event for the holders
of the Company’s class B common stock, other than Mr. Hays. Mr.
Hays has agreed to not participate in this transaction to control
the total debt and financial leverage that would have been required
to cash out all class B shares. Following the reverse and forward
stock splits, Mr. Hays will hold the same number of class B shares
as prior to the stock splits.
Each holder of class B common stock, other than
Mr. Hays, will receive a cash payment from the Company of $53.44
for each share of class B common stock, equal to the intra-day
volume weighted average price of the class B stock on Friday,
September 15, 2017.
The transaction will be funded by approximately
$31 million of cash on hand and a $70 million term loan. The
Company has received a commitment letter from First National Bank
of Omaha to fund a new $100 million credit facility consisting of
the initial $70 million term loan to fund the transaction, a
delayed draw term loan feature with $20 million of capacity for
future acquisitions and class A common stock repurchases, if any,
and a $10 million working capital revolving credit line. The
commitment is subject to customary closing conditions.
The mechanics of the transaction will consist of
a 1-for-1,764,560 reverse stock split of the Company’s class B
common stock followed by a 1,764,560-for-1 forward stock split of
the class B common stock. After the transaction, Mr. Hays will be
the sole remaining class B shareholder of the Company and the class
B common stock will be delisted from trading on the NASDAQ Stock
Market.
As a result of this transaction, class A common
stock will become the sole NASDAQ traded security of the Company.
This transaction will not impact the outstanding number of class A
shares. The percentage of total net income and dividends allocable
to the class A shares will rise from approximately 50% to
approximately 66% after the transaction assuming the retirement of
approximately 1,775,684 class B shares.
It is currently anticipated that the Board of
Directors will maintain the Company’s cash dividends.
Commenting on the Board’s action, Michael Hays
said, “We considered a wide range of options to address shareholder
concerns and confusion surrounding the trading of our dual classes
of stock on NASDAQ and believe the solution selected best achieves
our objectives of addressing the interests of all shareholders and
minimizing total debt and financial leverage on the Company.”
The transaction is subject to closing of
financing and approval by the holders of the Company’s class A
common stock, class B common stock and both classes of stock voting
together as a group. More information about the transaction is set
forth in the Company’s preliminary proxy statement filed with the
Securities and Exchange Commission today.
In closing, Michael Hays added, “Given our
desire that all information regarding this transaction be
correspondingly available, the Company will not be available for
selective calls from individual shareholders or analysts.”
Forward‑Looking Statements
This press release includes “forward-looking”
statements related to the Company that can generally be identified
as describing the Company’s future plans, objectives or goals. Such
forward-looking statements are subject to risks and uncertainties
that could cause actual results or outcomes to differ materially
from those currently anticipated. These forward-looking statements
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. For further information
about the factors that could affect the Company’s future results,
please see the Company’s filings with the Securities and Exchange
Commission.
Additional Information and Where to Find
It
The proposed reverse stock split of the shares
of class B common stock of National Research Corporation (the
“Company”) and the subsequent forward stock split of those shares
will be submitted to the shareholders of the Company for their
consideration. The Company has filed with the Securities and
Exchange Commission (the “SEC”) a preliminary proxy statement in
connection with the proposed stock splits. The Company also
intends to file with the SEC and mail to its shareholders a
definitive proxy statement. The Company urges investors and
shareholders to read the definitive proxy statement when it becomes
available, as well as other documents filed with the SEC, because
they will contain important information. Investors and
security holders will be able to receive the definitive proxy
statement and other documents (when they are available) free of
charge at the SEC’s web site, http://www.sec.gov, or from the
Company’s web site
https://nrchealth.com/about/investor-relations/.
Participants in the
Solicitation
This communication is not a solicitation of a
proxy from any investor or shareholder. However, the Company
and certain of its directors and executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies in connection with the
proposed stock splits under the rules of the SEC. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of the shareholders of the
Company in connection with the proposed stock splits will be set
forth in the definitive proxy statement when it is filed with the
SEC. You can find information about the Company’s directors and
executive officers in Annual Report on Form 10-K for the year ended
December 31, 2016, filed with the SEC on March 3, 2017, and the
definitive proxy statement relating to its 2017 Annual Meeting of
Shareholders filed with the SEC on April 3, 2017. These documents
can be obtained free of charge from the sources indicated
above.
About National Research
Corporation
For more than 36 years, National Research
Corporation has been a leading provider of analytics and insights
that facilitate measurement and improvement of the patient and
employee experience while also increasing patient engagement and
customer loyalty for healthcare providers, payers and other
healthcare organizations in the United States and Canada. The
Company’s solutions enable its clients to understand the voice of
the customer with greater clarity, immediacy and depth.
Contact:
Edmond Ashe
531-500-1449
National Research Corp. (delisted) (NASDAQ:NRCIA)
Historical Stock Chart
From May 2024 to Jun 2024
National Research Corp. (delisted) (NASDAQ:NRCIA)
Historical Stock Chart
From Jun 2023 to Jun 2024