Food Technology Service, which is backed by private equity firm Fort Ashford Holdings, said Friday that it has agreed to be acquired by an affiliate of GTCR portfolio company Sterigenics International. According to terms of the deal, Food Technology Service shareholders will $7.23 per share in cash. Craig-Hallum Capital Group advised Food Technology Service in the transaction. Based in Mulberry, Florida, Food Technology Service is a regional provider of sterilization services.
MULBERRY, Fla.–(BUSINESS WIRE)–Food Technology Service, Inc. (NASDAQ:VIFL) (the “Company” or “FTSI”), a regional provider of sterilization services, announced today that it entered into a definitive merger agreement, dated December 5, 2013, under which the Company will be acquired by an affiliate of Sterigenics International LLC (“Sterigenics”), a portfolio company of GTCR, LLC. Under the terms of the merger agreement, upon completion of the transaction, the shareholders of the Company (other than holders of excluded shares and dissenting shares, as described in the merger agreement) will receive $7.23 per share in cash. The purchase price represents a premium of 28.4% over the Company’s closing share price on December 5, 2013 and a premium of 27.2% over the Company’s average closing share price for the 30 trading days ending on December 5, 2013.
The Company’s board of directors, acting upon the unanimous recommendation of a special committee of the board of directors consisting of independent directors (the “Special Committee”), approved the merger agreement and resolved to recommend that the Company’s shareholders vote to approve the merger agreement. The Special Committee negotiated the terms of the merger agreement with the assistance of its legal advisor and the Company’s financial advisor.
Richard G. Hunter, Ph.D., President and CEO of the Company, commented, “This is great news for the Company and our customers and shareholders. It is a clear endorsement of Food Technology Service, Inc. and of the hard work and commitment of each and every one of our employees. Sterigenics and Food Technology Service, Inc. share the same commitment to technical expertise and providing high quality service and we look forward to joining them.”
Added Chairman of the board of directors and Chairman of the Special Committee, Dr. John Sinnott, “After a thorough assessment, we believe that this transaction appropriately recognizes the value of the Company’s business and provides our shareholders with a meaningful cash premium based on the current stock price.”
“We are excited to be partnering with FTSI and its management team,” stated Michael Mulhern, CEO of Sterigenics. “Richard Hunter and the FTSI team have built an attractive business with outstanding service and strong customer relationships. We look forward to adding FTSI to Sterigenics’ market-leading global sterilization platform.”
The transaction is subject to the approval of a majority of Food Technology Service, Inc. shareholders, regulatory approvals, and other customary closing conditions.
In addition, Dr. Hunter and Fort Ashford Holdings, LLC, a California-based private equity firm owning approximately 30% of the outstanding shares of Food Technology Service, Inc., have entered into a voting agreement with Sterigenics in which they have agreed to, among other things, vote all shares over which they have exercisable voting power in favor of the merger.
Craig-Hallum Capital Group LLC is acting as exclusive financial advisor to the Company and provided a fairness opinion to the Company Board of Directors and the Special Committee. Olshan Frome Wolosky LLP is acting as counsel for the Special Committee and Burr & Forman LLP as counsel for the Company. Holland & Knight LLP is acting as counsel for Sterigenics.
About the Company
Food Technology Service, Inc. owns and operates an irradiation facility located in Mulberry, Florida that uses gamma radiation to provide contract sterilization services to the medical device, packaging and food industries. For the Company’s website, please visit: www.ftsi.com.
Headquartered in Deerfield, Illinois, Sterigenics is a leading global provider of outsourced contract sterilization services, primarily to the medical device and food industries. The Company operates 39 facilities worldwide across the Americas, Europe and Asia and offers a range of services utilizing the most widely used sterilization technologies. For more information, please visit www.sterigenics.com.
Founded in 1980, GTCR is a leading private equity firm focused on investing in growth companies in the Financial Services & Technology, Healthcare and Information Services & Technology industries. The Chicago-based firm pioneered The Leaders Strategy™ – finding and partnering with management leaders in core domains to identify, acquire and build market-leading companies through transformational acquisitions and organic growth. Since its inception, GTCR has invested more than $10 billion in over 200 companies. For more information, please visit www.gtcr.com.