By Lisa Kerner
Charlotte, N.C., Oct. 6 - GSI Commerce Inc. agreed to acquire Innotrac Corp. in a cash and stock transaction valued at $52 million, or $61.9 million including Innotrac net debt.
Innotrac shareholders will receive $1.70 in cash and 0.1426 shares of GSI common stock, subject to adjustment, or approximately $4.03 per Innotrac share, a GSI news release said.
According to GSI, the deal will consist of $22 million in cash and shares of GSI common stock valued at $30 million - or 1,841,621 shares at $16.29 apiece, the volume-weighted average price over the 20 days prior to the agreement.
"Innotrac furthers our leadership position in e-commerce and multichannel services by bringing new clients, enhancing our scale for fulfillment and call center services and adding to our available capacity to support growth of new and existing clients," GSI chairman and chief executive officer Michael G. Rubin said in the release.
"We are also excited to begin our regional distribution strategy more than one year earlier than we had planned by utilizing Innotrac's Reno, Nevada fulfillment center," Rubin added.
The boards of directors of both companies approved the acquisition, which is expected to close during the first half of 2009.
GSI said closing conditions include the approval of Innotrac stockholders and the U.S. District Court for the Northern District of Ohio due to a settlement agreement.
If the volume-weighted average price of GSI common stock during the 20 trading days ending on the third trading day prior to the date of the Innotrac shareholders meeting to vote on the merger is between $13.03 and $20.85, the number of shares of GSI common stock to be received per share of Innotrac common stock will range from 0.1115 to 0.1784.
The total number of shares to be issued by GSI would then range from 1,438,849 to 2,302,379, GSI said.
If the stock price is above $20.85 or below $13.03, the number of shares will be fixed. Either party has the right to terminate the definitive agreement under certain circumstances if the price is below $11.12.
The merger agreement also contains termination rights for both GSI and Innotrac, it was reported in a form 8-K filed with the Securities and Exchange Commission.
Under specified circumstances, Innotrac will be required to pay GSI a termination fee of $1.6 million and reimburse GSI for up to $1.0 million of its expenses incurred in connection with the merger, the filing said.
Innotrac, based in Duluth, Ga., provides e-commerce fulfillment and customer care services.
GSI's services enable e-commerce, multichannel retailing and interactive marketing for large, business-to-consumer enterprises. The company is based in King of Prussia, Pa.
| Acquirer: | GSI Commerce Inc.
|
| Target: | Innotrac Corp.
|
| Announcement date: | Oct. 6
|
| Transaction total: | $61.9 million
|
| Price per share: | $1.70 cash and 0.1426 GSI shares
|
| Termination fee: | $1.6 million
|
| Expected closing: | First half of 2009
|
| Stock price for acquirer: | Nasdaq: GSIC: $13.96 on Oct. 3
|
| Stock price for target: | Nasdaq: INOC: $3.95 on Oct. 3
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
