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ValueAct to Buy Catalina and Take it Private
Major shareholder ValueAct Capital is on course to take consumer behavior and direct marketing firm Catalina Marketing Corporation private, in an all-cash transaction valued at $1.7 billion.
ValueAct has been an investor in Catalina since 2003 and its co-founder, managing partner and principal owner Jeffrey W. Ubben has served as one of the firm's directors since May 2006.
The buy includes the assumption of approximately $135m of current indebtedness. ValueAct Capital will acquire by merger 100% of the outstanding equity interests of the company that it does not already own.
If the deal goes through, Catalina stockholders will receive $32.10 in cash for each outstanding share of stock, a premium of c.32% over the closing share price on December 7, 2006, the last trading day before the initial disclosure that a sale was being considered (www.mrweb.com/drno/news6233.htm ). The price is also $0.10 a share higher than a previous bid by ValueAct on Feb. 20.
Under the terms of the merger agreement, Catalina may solicit or entertain alternative proposals from third parties during the next 45 days. The transaction is subject to approval by the company's other stockholders, and other usual approvals and conditions.
Frederick W. Beinecke, Chairman of the special committee established by Catalina to consider the sale, and of the Board of Directors, said the sale was 'the best alternative for maximizing value for existing shareholders'.
According to Ubben, 'Catalina has an impressive portfolio of businesses, unique products, strong cash flows and a highly skilled employee base. We are strong supporters of [CEO] Dick Buell and his management team. We are really looking forward to building on Catalina's strong foundation and are very excited to work with management and the company's employees to achieve its long term strategy.'
Buell says Ubben and his colleagues support the management's vision for the company and are committed to its execution; and that going private will allow the company to invest aggressively in pursuit of long-term goals, free of the fear of 'Wall Street backlash'.
ValueAct has offices in San Francisco and Boston and approximately $5 billion in investments.
Catalina's proposition is based around getting dynamic access to consumers at the point of sale and delivering targeted marketing messages based on insight into their behavior, with services including promotional messaging, loyalty programs and direct-to-patient information. The company, which is based in St. Petersburg, FL and had revenue of $123.1m in the latest quarter, is online at www.catalinamarketing.com .
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