Sumitomo Corp. of America (SCOA), together with its Japan-based parent, Sumitomo Corp., has entered into a definitive agreement to acquire TBC Corp.
Sumitomo will pay $35 per share in cash -- 15% higher than its 52-week high -- for a total transaction value of approximately $1.1 billion including debt. TBC's stock price on the NASDAQ exhange closed at $26.12 on Friday, Sept. 16.
The transaction, which is subject to approval by TBC's shareholders, as well as regulatory approval under the Hart-Scott-Rodino Act, is expected to close by the end of the year. Upon completion of the transaction, TBC will become a subsidiary of SCOA and will continue to be led by the existing senior management team.
"We are pleased that the TBC board of directors has approved this transaction," says SCOA CEO and President Susumu Kato. "This is the single largest investment that SCOA has made and complements our portfolio of operating companies.
"We look forward to working with TBC's existing management team to continue the successful implementation of their long-term business strategy."
"Our shareholders will receive a significant premium over current and historic trading levels, and the board is recommending shareholder approval of this transaction," says TBC CEO and President Larry Day. "In addition, the continuity of management will provide excellent opportunities for employees, franchisees and supply partners who have enjoyed long-term relationships with the company.
"As our board considered all the strategic and financial alternatives, it became clear that this transaction was in the best interest of all TBC stakeholders."
Lehman Brothers Inc. acted as financial advisor to TBC. Gibson, Dunn & Crutcher LLP and Thompson Hine LLP acted jointly as legal advisors to TBC.
Tri-Artisan Partners LLC acted as financial advisor to SCOA. Dewey Ballantine LLP acted as legal advisor to SCOA.
TBC intends to file a proxy statement and other relevant documents related to the proposed merger with the Securities and Exchange Commission (SEC). Investors and security holders will be able to obtain the documents free of charge at the SEC's Web site, www.sec.gov.
TBC stockholders and investors may obtain free copies of the documents filed with the SEC by TBC from its corporate Web site at www.tbccorp.com when they become available, or by directing a request by telephone at (561) 227-0955 or by mail to TBC Corp., Attention: Investor Relations, 7111 Fairway Drive, Suite 201, Palm Beach Gardens, FL 33418.
TBC, its directors and executive officers and other persons may, under the rules of the SEC, be deemed to be "participants" in the solicitation of proxies from stockholders of TBC in connection with the proposed merger. Information regarding the interests of such participants will be set forth in TBC's proxy statement regarding the proposed merger when it becomes available.
Information regarding certain of these persons and their beneficial ownership of common stock of TBC as of December 31, 2004, also is set forth in the proxy statement for TBC's 2005 Annual Meeting of Stockholders, which was filed with the SEC on May 2, 2005.
SCOA was established in 1952, and is headquartered in New York City. It operates offices in 10 American cities, and is the largest wholly-owned subsidiary of Tokyo-based Sumitomo Corp. For more information on the parent company, visit www.sumitomocorp.com.
