Dynamex Inc., a provider of same-day delivery and logistics services, on Tuesday, Nov. 30, announced that it has accepted an increased offer to be acquired by an affiliate of Greenbriar Equity Group for a price of $24 per share, or about $237.8 million. Dynamex says the price per share offered by Greenbriar matched the price per share included in a modified proposal that it had received from an “excluded party” on Nov. 23.
Dynamex says it and Greenbriar have signed an amendment to their previously announced merger agreement reflecting the new offer price, a revised termination fee of about $7.7 million, which is payable by Dynamex in the event that it terminates the merger agreement with Greenbriar in order to accept an unsolicited takeover proposal that the company’s board determines to be superior to Greenbriar’s increased offer, a revised reverse break-up fee of about $14.3 million, which is payable by Greenbriar if the merger fails to close because the debt financing is unavailable, and a revised reverse break-up fee of about $21.4 million, which is payable by Greenbriar upon termination of the merger agreement by Dynamex as a result of a material breach of the merger agreement by Greenbriar.
Dynamex announced Nov. 23 that a party that was designated as an “excluded party” in the company’s Oct. 1 agreement and plan of merger with Greenbriar affiliate DashNow Holding Corp. had submitted a formal binding offer for the acquisition of Dynamex in which its stockholders would receive $23.50 per share in cash. The proposal was to expire upon certain events, including Dynamex’s failure to accept, execute and deliver the agreement to the excluded party by 6 p.m. ET on Dec. 1.
The company said its board of directors had determined, in accordance with the terms of the DashNow merger agreement, that the new proposal constituted a “superior proposal” and that a failure to enter into the agreement would violate the directors’ fiduciary duties to the company’s stockholders under applicable law. Dynamex said the company’s board had consulted with its financial adviser and outside legal counsel in making this determination.
Dynamex said it had given written notice to DashNow of the company’s receipt of the excluded party’s proposal and the company’s intention to enter into the agreement. Dynamex said it was required to negotiate in good faith with DashNow for a period of four business days after the business day that the notice is received. Dynamex said that if DashNow did not favorably adjust the terms of the current merger agreement, it expected, promptly after the expiration of the negotiating period, to terminate the DashNow agreement and to enter into the agreement with the excluded party. Dynamex said it would be required to pay DashNow a breakup fee in the amount of $6.3 million, which payment would be made prior to or concurrently with such termination.
Several law firms had announced investigations into possible breaches of fiduciary duty and other violations of state law by members of the Dynamex board in connection with their efforts to sell the company to DashNow. Under terms of the original transaction announced Oct. 1, Dynamex shareholders would have received $21.25 in cash for each share of Dynamex common stock they hold.
The law firms based their investigations on concerns whether Dynamex’s board undertook a fair process to obtain fair consideration for all shareholders of Dynamex, particularly whether the company’s board breached its fiduciary duties to Dynamex shareholders by failing to adequately shop the company before entering into the transaction with DashNow and whether the transaction undervalued Dynamex to the detriment of its shareholders.
Greenbriar is a transportation and logistics-focused private equity firm with $1.5 billion of capital under management. The original transaction, with a value of about $210 million, was approved unanimously by the Dynamex board. The merger consideration represented a premium of about 39.3 percent over the Sept. 30 closing price of Dynamex and a 58.4 percent premium over the average closing price for the 30 trading days prior to Oct. 1. Following completion of the proposed transaction, Dynamex no longer would be traded publicly.
Dynamex said that under terms of the original agreement, the company and its advisers were permitted to solicit and consider alternative proposals from third parties for a period of 40 days following the date of the merger agreement. In addition, Dynamex was allowed to respond to unsolicited proposals at any time.