Insituform Technologies Inc. (Nasdaq: INSU) has agreed to acquire Corrpro Companies Inc. (OTYC BB: CRRP) for approximately $91 million. Corrpro is a Medina, Ohio-based maker of corrosion control engineering services, systems and equipment. Its shareholders include American Capital and Wingate Partners.
“This represents the next chapter in Corrpro‘s life. Insituform gives us a stable financial base and a clear direction moving forward. It will enhance our growth strategy, allowing us to grow organically as well as pursue acquisitions. Moreover, it gives us an outstanding footprint in the energy and water infrastructure markets,” said Bill Larkin, President and Chief Executive Officer of Corrpro.
The transaction is based on an enterprise value of approximately $91 million, subject to adjustment. On a per share basis, Corrpro estimates that each issued and outstanding share of Corrpro common stock will be converted into cash consideration of approximately $1.44 per share, subject to reduction at closing if Corrpro‘s debt (excluding its revolver) or transaction expenses exceed certain levels and subject to increase at closing of up to $0.03 per share if certain diligence items are resolved prior to closing.
The merger has been approved by the boards of directors of both Corrpro and Insituform, and is subject to certain conditions, including, but not limited to, the closing of definitive debt financing arrangements with potential lenders, approval of the Company’s shareholders, satisfaction by the company of certain financial and operational covenants, receipt of applicable regulatory approvals and other customary closing conditions for transactions of this type. The merger requires the affirmative vote of the holders of a majority of Corrpro‘s common stock, voting together with the holders of the Corrpro‘s Series B Cumulative Redeemable Voting Preferred Stock as a single class, as well as the affirmative vote of the holders of a majority of the Series B Preferred Stock. When the Series B Preferred Stock votes with the common stock, it holds approximately 51 percent of the combined voting power. The sole holder of Series B Preferred Stock has entered into a voting agreement with Insituform under which it has agreed to vote in favor of the merger. Therefore, we expect that the shareholders of Corrpro will approve the merger. The merger is currently expected to close on or before March 31, 2009. There can be no assurance that the foregoing closing conditions will be met or that the Merger will close as anticipated.
Corrpro was advised by Houlihan Lokey, as financial advisor, and Haynes and Boone, LLP, as legal counsel, for the transaction.
About Corrpro Companies, Inc.
Corrpro, headquartered in Medina, Ohio, with over 30 offices worldwide, is the leading provider of corrosion control engineering services, systems and equipment to the infrastructure, environmental and energy markets around the world. Corrpro is a leading provider of cathodic protection systems and engineering services, as well as corrosion protection services relating to coatings, pipeline integrity and reinforced concrete structures.