(Reuters) – ATC Technology Corp (ATAC.O), an engineering and logistics services provider, said it agreed to be acquired by privately held GENCO Distribution System Inc for about $512.6 million in cash.
The $25 per share deal represents a 43.4 percent premium to ATC stock’s Friday’s closing price.
The deal follows a difficult phase in the engineering and logistics services sector, which was hurt by the downturn, and ATC Technology had cut its 2010 outlook in March citing a decline in returns volume with one of its key customers AT&T Inc (T.N).
Under the terms, ATC and its advisers can and intend to actively solicit alternative bids from third parties until Aug. 17, ATC said in a statement.
GENCO said it will partly fund the deal by offering shares to affiliates of Greenbriar Equity Group LLC for about $125 million.
The deal will also be financed through borrowings under a $450 million new line of credit to be extended to GENCO by PNC Bank, National Association and Wells Fargo Bank N.A., and through cash on hand.
Following the completion of the deal, ATC will become a wholly owned subsidiary of GENCO, will be fully integrated into GENCO and will no longer trade publicly, ATC said.
Pittsburgh, Pennsylvania-based GENCO is a third-party provider of logistics services for retailers, manufacturers and U.S. government agencies.
ATC shares rose 39 percent to $24.25 in trading before the bell Monday. (Reporting by Bijoy Koyitty in Bangalore; Editing by Unnikrishnan Nair and Gopakumar Warrier)