Acquisition of American Pacific Corporation by H.I.G. Capital, LLC May Not Be in Shareholders’ Best Interests
Robbins LLP are investigating the acquisition of American Pacific Corporation (NASDAQ: APFC) by affiliates of H.I.G. Capital, LLC. On January 9, 2014, the companies announced the signing of a definitive merger agreement pursuant to which H.I.G. Capital will commence a tender offer to acquire all outstanding shares of American Pacific common stock for $46.25 per share in cash.
Is the Proposed Merger Best for American Pacific and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at American Pacific is undertaking a fair process to obtain maximum value and adequately compensate American Pacific shareholders in the merger.
As an initial matter, the $46.25 consideration represents a one day premium of less than 19% based on American Pacific’s closing price on January 9, 2014. This one day premium is substantially below the average one day premium of nearly 37% for comparable transactions in the last three years. In addition, American Pacific shares have traded significantly above the offer price as recently as November 5, 2013 and traded as high as $53.75 on October 17, 2013 and closing at $53.09 that same day.
On December 12, 2013, American Pacific released its financial results for the period ending September 30, 2013, revealing record performances for both revenue and adjusted EBITDA. Specifically, the company reported that revenues for the fiscal year 2013 increased $29.5 million, or 16%, to $215.1 million and adjusted EBITDA increased to $55.2 million from $43 million for the same period in 2012. Further, American Pacific reported that adjusted income from continuing operations reached $24.9 million compared to $10.1 million in the prior year.
In commenting on the results, Joe Carleone, American Pacific’s Chairman of the Board and Chief Executive Officer, stated: “Although our profit expectation for Fiscal 2014 is lower in the aggregate, the components provide a robust future for AMPAC. Fine Chemicals segment opportunities are continuing to expand and our Specialty Chemicals segment should return to operating at its pre-Fiscal 2013 stable levels.”
Given these facts, Robbins LLP is examining whether the American Pacific board of directors are seeking to benefit themselves with their decision to sell the company to H.I.G. Capital now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
American Pacific shareholders have the option to file a class action lawsuit to ensure the board of directors properly evaluates the proposal to obtain the best possible price for shareholders and the disclosure of material information.
American Pacific shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.