Catalina Marketing Agrees to be Acquired by Hellman & Friedman for $32.50 Per Share in Cash
18 April 2007 - 12:00AM
Business Wire
Catalina Marketing Corporation (NYSE:POS) announced today that it
has entered into a definitive merger agreement to be acquired by
private equity firm Hellman & Friedman Capital Partners VI,
L.P. and its related funds in an all-cash transaction valued at
$1.7 billion, including the assumption of approximately $136
million of current indebtedness. Hellman & Friedman will
acquire by merger 100% of the outstanding equity interests of the
company for $32.50 per share in cash, $0.40 per share higher than
under the terms of the agreement signed on March 8, 2007 with
affiliates of ValueAct Capital Master Fund L.P. (ValueAct Capital).
Hellman & Friedman LLC is a leading private equity investment
firm with offices in San Francisco, New York and London and is
currently investing its sixth fund, which has over $8 billion of
committed capital. Under the terms of the merger agreement,
Catalina stockholders will receive $32.50 in cash for each
outstanding share of stock. This represents a premium of
approximately 34% over the closing share price on December 7, 2006,
the last trading day before disclosure of the initial unsolicited
expression of interest from a third party private equity firm with
respect to the acquisition of the company. The company has
terminated its merger agreement with ValueAct Capital and paid the
$8.44 million termination fee as required by the terms of that
agreement. Under the terms of the merger agreement with Hellman
& Friedman, Catalina has agreed to pay a termination fee of
$50.6 million in the event it chooses to accept a competing bid
prior to the vote of the stockholders with regard to the Hellman
& Friedman agreement. The company previously disclosed that it
had engaged Goldman, Sachs & Co. as its financial advisor and
that the special committee retained Lazard, to assist it in
connection with its deliberations. Based on its consultations with
these firms, and following discussions with various other
potentially interested parties and other activities, the special
committee and the entire board of directors (with Jeffrey W. Ubben,
a principal of ValueAct Capital, not participating) of the company
have unanimously approved the merger agreement and the board of
directors has recommended that the company�s stockholders vote in
favor of the merger agreement. Pending the receipt of shareholder
approval and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other
required regulatory approvals, as well as satisfaction of other
customary closing conditions, the transaction is expected to be
completed in the third quarter of 2007. Hellman & Friedman has
received customary debt financing commitments from Bear Stearns and
Morgan Stanley. In connection with the Hellman & Friedman
merger agreement, Frederick W. Beinecke, the chairman of the board
of directors of the company, and Antaeus Enterprises, an affiliate
of Mr. Beinecke, have entered into a voting agreement with Hellman
& Friedman pursuant to which Mr. Beinecke and Antaeus will vote
the aggregate of 2.9 million shares of common stock owned by them
in favor of the transaction. It is noted also that ValueAct has
previously signed an agreement with the company pursuant to which
ValueAct will vote the 7.2 million shares owned by it in favor of
the transaction with Hellman & Friedman. �We are pleased that
we were able to negotiate additional value for our shareholders
during the period following the signing of the ValueAct agreement.
Our management remained focused on the business while
simultaneously doing an excellent job in working with a variety of
potential alternative purchasers. The additional consideration
available to our shareholders is a direct result of their efforts
and the process guided by our outside advisors,� said Frederick W.
Beinecke, chairman of the special committee and of the board of
directors. �Hellman & Friedman, which is a leading private
equity firm, has recognized the value of our company.� �We believe
Catalina Marketing is a uniquely positioned full-service media and
marketing services company,� said Andrew Ballard, Managing Director
of Hellman & Friedman LLC. �Its businesses provide customers
with innovative products and it generates strong cash flows, and
has a world-class management team. We look forward to partnering
with Catalina to serve its current and future customers and to
achieve its long-term business goals.� �Hellman & Friedman will
be an excellent partner for Catalina. They are knowledgeable
professionals that understand our business, and importantly,
support our long term growth strategy to serve our customers with
our unique and superior marketing solutions,� said Dick Buell,
chief executive officer. �Hellman & Friedman and our entire
management team are committed to continue building our business
beyond its existing foundation to deliver additional opportunities
for our customers and our employees. We look forward to working
with Hellman & Friedman as the company moves into its next
phase of growth and development.� The company also announced that
it has amended the terms of its Stockholder Protection Agreement,
initially entered into on May 8, 1997, to exempt the transaction
with Hellman & Friedman from the effects of such agreement,
increase the exercise price associated with the agreement from $40
to $90 and extend the final expiration date of the Stockholder
Protection Agreement from April 22, 2007 until the earlier of the
effective date of the transaction with Hellman & Friedman or
April 22, 2008. About Catalina Marketing Corporation Based in St.
Petersburg, FL, Catalina Marketing Corporation
(www.catalinamarketing.com) was founded over 20 years ago based on
the premise that targeting communications based on actual purchase
behavior would generate more effective consumer response. Today,
Catalina Marketing combines unparalleled insight into consumer
behavior with dynamic consumer access. This combination of insight
and access provides marketers with the ability to execute
behavior-based marketing programs, ensuring that the right consumer
receives the right message at exactly the right time. Catalina
Marketing offers an array of behavior-based promotional messaging,
loyalty programs and direct-to-patient information. Personally
identifiable data that may be collected from the company's targeted
marketing programs, as well as its research programs, are never
sold or provided to any outside party without the express
permission of the consumer. About Hellman & Friedman LLC
Hellman & Friedman LLC is a leading private equity investment
firm with offices in San Francisco, New York and London. The Firm
focuses on investing in superior business franchises and serving as
a value-added partner to management in select industries including
media and marketing services, financial services, professional
services, asset management, software and information services, and
energy. Since its founding in 1984, the Firm has raised and,
through its affiliated funds, managed over $16 billion of committed
capital and is currently investing its sixth partnership, Hellman
& Friedman Capital Partners VI L.P., with over $8 billion of
committed capital. Representative investments include: DoubleClick,
Young & Rubicam, Digitas Inc, The Nielson Company, Axel
Springer AG, ProSiebenSat1, The Nasdaq Stock Market, Intergraph
Corporation, Vertafore, Inc., and Texas Genco LLC. About the
Transaction In connection with the proposed merger, Catalina
Marketing Corporation will file a proxy statement with the
Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS
ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES
AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors
and security holders may obtain a free copy of the proxy statement
(when available) and other documents filed by Catalina Marketing
Corporation at the Securities and Exchange Commission's Web site at
http://www.sec.gov. The proxy statement and such other documents
may also be obtained for free by directing such request to Catalina
Marketing Corporation, Investor Relations, 200 Carillon Parkway,
St. Petersburg, FL 33716, telephone: (727) 579-5116 or on the
company's website at
http://phx.corporate-ir.net/phoenix.zhtml?c=72727&p=irol-IRHome.
Catalina Marketing 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 merger. Information
regarding the interests Catalina�s participants in the solicitation
will be included in the proxy statement relating to the proposed
merger when it becomes available. Certain statements in the
preceding paragraphs are forward-looking, and actual results may
differ materially. Statements not based on historic facts involve
risks and uncertainties, including, but not limited to, the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement with Hellman
& Friedman, the outcome of any legal proceedings that may be
instituted against the Company related to the merger agreement; the
inability to complete the merger due to the failure to obtain
stockholder approval for the merger or the failure to satisfy other
conditions to completion of the merger; risks that the proposed
transaction diverts management or disrupts current plans and
operations and any potential difficulties in employee retention as
a result of the merger and the impact of the substantial
indebtedness to be incurred to finance the consummation of the
merger,
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