Miami-based private equity firm H.I.G. Capital will pay $75.2 million in cash to buy Matrixx Initiatives, a producer of over-the-counter healthcare products. H.I.G. will pay $8 per share, which represents a 56.3% premium over the company’s closing price yesterday. Matrixx is based in Scottsdale, Ariz.
Matrixx Initiatives, Inc. (Nasdaq: MTXX) (“Matrixx” or the “Company”) today announced that it has entered into a definitive merger agreement to be acquired by investment funds managed by H.I.G. Capital, LLC, a leading global private investment firm.
Under the terms of the merger agreement, affiliates of H.I.G. will commence a tender offer to purchase for cash all of the outstanding shares of Matrixx common stock, and the associated preferred stock purchase rights, at a price of $8.00 per share, which represents a 56.3% premium to the Company’s closing stock price on December 13, 2010, the last full trading day before today’s announcement, for a total value of approximately $75.2 million.
The tender offer is expected to commence on December 22, 2010 and to expire on the 20th business day following and including the commencement date, unless extended in accordance with the terms of the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission. If the tender offer is successfully completed, the parties will complete a second−step merger in which any remaining shares of Matrixx would be converted into the right to receive the same price per share paid in the tender offer.
Completion of the transaction is subject to, among other things, the satisfaction of the minimum tender condition of at least the majority of the Company’s outstanding common shares on a fully diluted basis, expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and other customary closing conditions, but is not subject to any financing condition.
The Board of Directors of Matrixx has unanimously approved the merger agreement and the transactions contemplated by the merger agreement and has resolved to recommend that the Matrixx stockholders tender their shares in connection with the tender offer contemplated by the merger agreement.
Under the terms of the merger agreement, Matrixx may solicit acquisition proposals from third parties for a period from execution of the merger agreement until 11:59 p.m. on January 22, 2011. The Company’s financial advisor, Sawaya Segalas LLC, will assist the Company’s Board of Directors in connection with the solicitation. It is not anticipated that any developments will be disclosed with regard to this process unless the Company’s Board of Directors makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.
Sawaya Segalas & Co., LLC is acting as financial advisor to Matrixx. Sullivan & Cromwell LLP and Snell & Wilmer LLP are acting as legal counsel to Matrixx. Kirkland & Ellis LLP is acting as legal counsel to H.I.G.
About Matrixx Initiatives, Inc.
Matrixx Initiatives, Inc. is an over-the-counter healthcare company that develops and markets Zicam® products. Zicam, LLC, its wholly-owned subsidiary, markets and sells Zicam® products in the cough and cold category. The Company markets Zicam brand pharmaceuticals, including Zicam Cold Remedy in multiple oral delivery forms; Zicam Allergy and Congestion Relief products; as well as Zicam Cough and Zicam Multi-Symptom relief items. For more information regarding Matrixx products, go to www.Zicam.com. To find out more about Matrixx Initiatives, Inc. (Nasdaq: MTXX), visit our website at www.matrixxinc.com. For additional information, contact William Hemelt, President and Chief Executive Officer, 602-385-8888, or Bill Barba, Vice President of Finance & Accounting, 602-385-8881. Matrixx is located at 8515 E. Anderson Dr., Scottsdale, Arizona 85255.
H.I.G. Capital is a leading global private equity investment firm focused exclusively on the middle market. It has a broad and flexible capital base and more than $7.5 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, New York and San Francisco in the U.S., as well as affiliate offices in London, Hamburg and Paris in Europe, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. Since its founding, H.I.G. has invested in and managed more than 200 companies worldwide. The firm’s current portfolio includes companies with combined revenues in excess of $7 billion. For more information, please refer to the H.I.G. website at www.higcapital.com.