08.15.12
Physicians Formula Holdings, Inc. and Swander Pace Capital have entered into a definitive merger agreement under which affiliates of Swander Pace will acquire Physicians Formula.
Under the terms of the merger agreement, Swander Pace, through its affiliates, will acquire all outstanding shares of the common stock of Physicians Formula for $4.25 per share in cash, or approximately $65 million. The per share price represents a premium of approximately 15% over Physicians Formula's closing stock price on Aug. 14, 2012 and a 21% premium to the Company's one-month volume-weighted average price of $3.50 per share. The Physicians Formula's Board of Directors, acting upon the unanimous recommendation of its Special Committee composed solely of independent directors, unanimously approved the merger agreement and resolved to recommend that the Company's stockholders vote to adopt the merger agreement.
Upon close of the merger, Physicians Formula will be privately owned and will continue to be operated by the company's current management team and employees. Physicians Formula, founded in 1937 by Dr. Frank Crandall, will remain based in Azusa, CA.
"Our Board of Directors, following a thorough analysis by its Special Committee, has determined that this transaction offers the best value for our stockholders," said Ingrid Jackel, Physicians Formula Chairwoman and CEO. "We are pleased that Swander Pace has agreed to purchase our company. The firm has a record of success in acquiring and operating companies in the consumer space, and we believe they will add value to our business as we continue to successfully execute our growth initiatives."
The transaction, subject to various closing conditions including receipt of Physicians Formula stockholder approval, is expected to close later this year.
In other news, Pomerantz Grossman Hufford Dahlstrom & Gross LLP is investigating claims on behalf of investors of Physicians Formula Holdings, Inc. concerning the proposed acquisition of Physicians Formula by Swander Pace Capital in a cash transaction valued at approximately $65 million.
The investigation concerns whether the Physicians Formula directors are breaching their fiduciary duties by failing to adequately shop the Company and maximize shareholder value. Under the terms of the agreement, Physicians Formula shareholders would receive $4.25 in cash per share of Physicians Formula common stock. However, at least one analyst has set a target price of $5.00 per share.