MATTHEWS, N.C., April 21 /PRNewswire/ -- PCA International, Inc.
(Nasdaq: PCAI) and Jupiter Partners L.P. announced today they have entered
into a definitive merger agreement under which Jupiter Partners and PCA senior
management including John Grosso, President and Chief Executive Officer of
PCA, will acquire between 95% and 97% of the primary common stock of PCA for
$26.50 per share. The transaction, which will be accounted for as a
recapitalization, is valued at approximately $276 million, including the
refinancing of existing debt. The merger has been approved by the Board of
Directors of PCA and is expected to be completed in July. PCA will continue
to be run by its current management team led by Mr. Grosso.
Under the terms of the agreement, the holder of each share of common stock
of PCA can elect to receive $26.50 in cash for each share or to retain
(subject to proration) a share of stock in the surviving entity. Public
shareholders will be permitted to retain (subject to proration) a continuing
equity interest in the Company of no more than approximately 4.5% and no less
than approximately 3.4% of the current outstanding shares of the Company.
"This transaction represents an outstanding opportunity for PCA and its
shareholders," said Grosso. "The partnership with Jupiter offers a unique
win-win scenario for everyone involved. It provides public shareholders a
cash premium to the market and the opportunity for continuing equity
participation. For the new equity holders, along with all PCA employees,
customers, and retail partners, this allows us to pursue our longer-term
business plan for the benefit of all our constituencies."
"PCA has an outstanding management team, highly skilled employees, and
excellent customer relationships," said John A. Sprague, General Partner,
Jupiter Partners. "We look forward to working closely with management and
providing strong support for the Company as it continues to pursue its
strategy."
The merger is subject to customary terms and conditions, including
approval by PCA shareholders, the expiration of applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the
receipt by Jupiter of funding under its financing commitments. Subject to
various exceptions, the agreement places certain restrictions on the Company's
ability to pursue alternative transactions.
Senior bank financing for the recapitalization is expected to be provided
by NationsBank, N.A. In addition, affiliates of NationsBank, N.A. and the
Chase Manhattan Bank have committed to provide subordinated debt financing in
connection with the recapitalization.
The offer will be made only pursuant to documents that will be filed with
the Securities and Exchange Commission and mailed to stockholders of PCA as
promptly as practicable. The Company's annual meeting of shareholders,
traditionally held in May following the fiscal year-end, will be delayed to
allow for the preparation and filing of proxy materials. A Special Meeting of
PCA shareholders will then be held for the purpose of considering and taking
action upon the approval of the Merger Agreement and the Merger. The timing
of this Special Meeting is yet to be determined.
PCA International, Inc. is a holding company which sells and processes
professional color portraits of children, adults, and families. The Company
operates 2,075 portrait studios within Kmart and Wal-Mart stores and
supercenters in the United States, Canada, Mexico, Puerto Rico, and South
America. The Company also operates an extensive traveling business providing
portrait photography services in approximately 1,400 additional retail
locations and to church congregations and other institutions.
Jupiter Partners L.P. is a New York-based investment firm organized to
invest in management buyouts and growth capital opportunities. Founded in
1994, Jupiter Partners has over $500 million in total committed capital.
Including its pending investment in PCA, Jupiter Partners has completed equity
investments totaling over $350 million in eight companies.
SOURCE PCA International, Inc.
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Company News On-Call: http://www.prnewswire.com or fax
800-758-5804 ext. 114272
CONTACT:
For PCA International, John Grosso,
President, Chief Executive Officer, 704-847-8011, For Jupiter
Partners, Anna Cordasco, Managing Director, Sard Verbinnen & Co.,
212-687-8080
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