A consortium formed by a subsidiary of funds advised by Apax Partners and Stephan Cretier, founder, chairman and CEO of Garda World Security Corporation, a global security solutions and cash logistics business, is to acquire the company. The business is being sold for C$1.1 billion in cash, including assumed debt.
Garda World Security Corporation (“Garda”) (TSX:GW), one of the leading Security Solutions and Cash Logistics firms in the world, announced today that it has entered into a definitive agreement pursuant to which a consortium formed by Stephan Cretier, Founder, Chairman and CEO of Garda, and a subsidiary of funds advised by Apax Partners (“Apax”), a global private equity firm, have agreed to acquire Garda for C$1.1 billion in cash, including assumed debt.
Under the terms of the transaction, which is structured as a plan of arrangement under the Canada Business Corporations Act, the consortium will acquire each Class A share of Garda for C$12.00 in cash, which represents a 30% premium over the closing price of the Class A shares on September 6, 2012 and a 45% premium to the 90-day volume-weighted average price of Garda Class A shares on the Toronto Stock Exchange for the period ended September 6, 2012, the last trading date prior to this announcement.
“Garda is a great Canadian success story and we intend to expand on that achievement,” said Stephan Cretier. “To achieve this goal, we intend to continue to pursue our growth strategy both organically and through acquisitions, which we can more efficiently accomplish as a private company. With Apax becoming a major shareholder, Garda will have access to a more flexible and efficient structure to fuel its growth.
“The investment by Apax is a ‘win-win’ opportunity for everyone involved. It provides Garda shareholders with a significant all-cash premium for their shares, while assuring a superior and sustained service for our clients,” continued Mr. Cretier. “I’m proud of our accomplishments over our 17-year history. We owe our success and our bright future prospects to the talented and dedicated people at all levels of our company.”
Mitch Truwit, a Partner at Apax and Co-Head of the firm’s Financial & Business Services team, said, “We are excited to partner with Garda’s highly-motivated, entrepreneurial management team to pursue growth opportunities in selected markets globally.”
The transaction has been approved unanimously by the Board of Directors of Garda (with Mr. Cretier abstaining) following the unanimous recommendation of a Special Committee of Independent Directors. The Board of Directors of Garda determined that the transaction is fair to shareholders and is in the best interests of Garda. The Board of Directors of Garda also unanimously recommends that shareholders vote in favour of the transaction at the special meeting of shareholders that will be called to approve the transaction.
UBS Securities Canada Inc., as financial advisor to the Board of Directors, and Desjardins Capital Markets, as independent valuator and financial advisor to the Special Committee, have each provided an opinion that the consideration to be received by the Class A Shareholders (other than Mr. Cretier) under the plan of arrangement is fair, from a financial point of view, to the shareholders other than Mr. Cretier. Desjardins Capital Markets has also provided the Special Committee with a formal valuation that concludes that the fair market value of the Class A shares is between C$10.75 and C$12.25 per Class A share.
Norton Rose Canada LLP advised the Special Committee, Séguin Racine is acting as legal advisor, UBS Securities Canada Inc. and TD Securities acted as M&A advisors to Garda.
Royal Bank of Canada acted as M&A advisor to Apax Partners and along with Bank of America Merrill Lynch are providing financing for the transaction. Stikeman Elliot LLP and Simpson Thacher & Bartlett L.L.P. acted as legal counsel and PwC as financial diligence advisor to Apax Partners.
Shareholders (including Mr. Cretier) holding approximately 25.6% of the outstanding Class A shares have entered into voting agreements pursuant to which such shareholders have agreed to vote their Class A shares in favour of the transaction, subject to the terms and conditions of such voting agreements.
The completion of the transaction is subject to Court approval and the approval of Garda’s shareholders by more than 66 2/3% of the votes cast by shareholders present in person or by proxy at the special meeting and by holders of more than 50% of the votes cast by Garda’s minority shareholders. The Company intends to mail a proxy circular in the upcoming weeks to shareholders and option holders for a meeting expected to be held in October 2012. The transaction is subject to customary closing conditions, including receipt of all regulatory approvals, and is expected to close later this calendar year.
Further details regarding the terms of the transaction are set-out in an Arrangement Agreement which will be publicly filed by Garda under its profile at www.sedar.com.
Garda is a global provider of security and cash logistics solutions. With headquarters in Montreal, Canada, the firm’s 45,000 dedicated professionals, among the most highly qualified and best-trained in the industry, serve clients in countries throughout North America, Europe, Latin America, Africa, Asia and the Middle East. Garda works with clients in a broad range of sectors and industries including financial institutions, retailers, governments, humanitarian relief organizations and the natural resources, construction and telecommunications industries. Garda’s global experts take the time to fully understand their clients’ business goals and objectives in order to customize solutions with strong local engagement that meet their needs. As a result, clients can improve operational performance, meet their business obligations, and achieve their corporate objectives. With proven experience and a commitment to ensuring the highest ethical standards in everything the company does, Garda has earned a reputation for integrity, leadership and uncompromising safety standards. Most importantly, businesses, governments and individual clients place their trust in Garda.
ABOUT STEPHAN CRETIER: Founder, President and CEO of Garda World Security Corporation (“Garda”), Mr. Cretier is the largest shareholder of the Corporation with directly or indirectly approximately 23.5% of shares outstanding. He founded Garda in 1995 with an investment of C$25,000 and grew the company to in excess of C$1.2B in annual revenues. Throughout his career, he has been honored on numerous occasions for his accomplishments as a business leader and entrepreneur. In 2011, he was named Entrepreneur of the Decade by Profit Magazine as one of eleven remarkable Canadian CEOs. Mr. Cretier is an engaged business person and philanthropist.
ABOUT APAX PARTNERS: Apax Partners is one of the world’s leading private equity investment groups. It operates across the United States, Europe and Asia and has more than 30 years of investing experience. Funds under the advice of Apax Partners total over US$35 billion around the world. These Funds provide long-term equity financing to build and strengthen world-class companies. Funds advised by Apax Partners invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Financial & Business Services.