Centerplate Signs Merger Agreement with Kohlberg & Company
September 18 2008 - 9:43PM
PR Newswire (US)
Centerplate Obtains Additional Amendment to Senior Credit Facility
STAMFORD, Conn., Sept. 18 /PRNewswire-FirstCall/ -- Centerplate,
Inc. (Amex: CVP; TSX: CVP.un), today announced that it has signed a
definitive merger agreement with an affiliate of Kohlberg &
Company, L.L.C. (Kohlberg & Company), a leading private equity
firm, to be acquired in an all cash transaction. The Board of
Directors of Centerplate has unanimously approved the transaction.
Under the terms of the agreement, the transaction will be
accomplished through a debt tender for up to 70% of the notes and a
merger in which 100% of the Company's common stock will be
acquired. Each unit holder who tenders the notes underlying their
units will receive $3.99 for each note tendered, subject to
proration if more than 70% of the notes are tendered. At the
closing of the merger, each unit holder will also receive $0.01 per
share for the common stock underlying their units for a total
payment to IDS holders of $4.00 per unit. This represents a premium
of approximately 33% over Centerplate's closing price today. David
Williams, Chairman of the Board of Centerplate said, "In May of
this year we initiated a formal process to identify the best
structure to give Centerplate the flexibility to strengthen the
company and maximize value for unit holders. The process has been
extensive and we have thoroughly reviewed a number of alternatives.
Given the realities of the economic environment and tight credit
markets, we are confident that we have found the best available
outcome for our unit holders and the company." Janet Steinmayer,
President and CEO of Centerplate said, "We are extremely pleased to
be joining with Kohlberg & Company -- a private equity firm
with a solid track record of investing in companies like ours -- in
a transaction that will provide important benefits for unit
holders, clients, employees and other stakeholders. Kohlberg
recognizes the strength of our franchise and shares our vision so
we will be in an even stronger position to serve the long-term
interests of our clients." "Centerplate is recognized as an
innovative market leader. We are excited to partner with
Centerplate as it continues to help clients grow their business,"
said Gordon Woodward of Kohlberg & Company. The transaction is
expected to be completed in the first quarter of 2009, and is
subject to the approval of holders of a majority of the common
stock, receipt of valid tenders of 50.1% of the notes, receipt of
consent from holders of at least 50.1% of the notes to certain
amendments to the indenture governing the notes, and the receipt of
third-party approvals and other customary closing conditions. The
transaction will be financed by Kohlberg through a combination of
equity and debt financing. Centerplate also obtained an additional
amendment to its senior credit facility to allow time for the
completion of the acquisition by Kohlberg & Company. The key
terms of the new amendment extend the adjusted senior leverage
ratio, obtained in the May 2008 amendment, through February of 2009
and exclude transaction fees from the calculation of the ratios.
While the amendment permits the Company to pay interest on the
subordinated notes on November 20, 2008, the credit agreement will
require the company to defer interest on the subordinated notes
following the November payment until the closing of the
transaction. Deferred interest, and interest accrued thereon, will
be paid on the closing date of this transaction. If the merger
agreement announced today is not completed by March 2009, the
Company will require a further amendment to its senior credit
facility. About the Transaction In connection with the proposed
merger, Centerplate 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 about the
merger and the parties to the merger. Information concerning the
interests of Centerplate's officers and directors in the
solicitation, which may be different than those of Centerplate's
security holders generally, will be set forth in the proxy
statement relating to the merger. Investors and security holders
may obtain a free copy of the proxy statement (when available) and
other documents filed by Centerplate at the Securities and Exchange
Commission's Web site at http://www.sec.gov/. The proxy statement
and other documents also may be obtained for free from Centerplate
by directing such request to Centerplate, Investor Relations, 2187
Atlantic Street, Stamford, CT 06902, or by calling 203-975-5941 or
by going to the company's web site at http://www.centerplate.com/ .
This press release is neither an offer to purchase nor a
solicitation of an offer to sell the notes or any other security.
An official offer to purchase and the related letter of transmittal
will be sent to unit holders. UBS Investment Bank is acting as
financial advisor to Centerplate and Cahill Gordon & Reindel
LLP is acting as its legal advisor. Abrams & Laster is acting
as special Delaware counsel to the Board of Directors. Evercore
Partners has provided the Board of Directors with an opinion in
connection with the transaction. The Blackstone Group is acting as
financial advisor and Ropes & Gray LLP is acting as legal
advisor to Kohlberg & Company. About Centerplate Centerplate,
with its principal executive office in Stamford, CT, is a leading
provider of food and related services including concessions,
catering and merchandise services in more than 130 sports
facilities, convention centers and other entertainment venues
throughout the United States and Canada. Visit the company online
at http://www.centerplate.com/. About Kohlberg & Company
Kohlberg & Company, L.L.C. is a leading private U.S. equity
firm with offices in Mt. Kisco, New York and Menlo Park,
California. Since its inception in 1987, Kohlberg has completed
more than 90 platform and add-on acquisitions as the control
investor in a variety of industries including manufacturing,
healthcare, consumer products and service industries. Kohlberg has
invested a total of $2 billion in equity across six private equity
funds with aggregate transaction value of approximately $7 billion.
Forward-Looking Statements This news release includes
forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act.
These statements may involve risks and uncertainties that could
cause actual results to differ materially from those described in
such statements. Although Centerplate believes that the
expectations reflected in these forward-looking statements are
reasonable, the company can give no assurance that these
expectations will prove to have been correct or that they will
occur. Important factors beyond Centerplate's control, including
general economic conditions, the outcome of the company's
exploration of alternatives, consumer spending levels, changing
trends in our business and competitive environment, the company's
borrowing capacity and the provisions of the credit agreement, the
provisions of the indenture, adverse weather conditions and other
factors, as well as the risks identified in our most recent annual
report on Form 10-K and other filings with the Securities and
Exchange Commission could cause actual results to differ materially
from Centerplate's expectations. Centerplate undertakes no
obligation to update or review any forward-looking statement,
whether as a result of new information, future developments or
otherwise. Contact Information Gael Doar Director of Communications
203-975-5941 DATASOURCE: Centerplate CONTACT: Gael Doar, Director
of Communications of Centerplate, +1-203-975-5941, Web site:
http://www.centerplate.com/ http://www.sec.gov/
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