By CRM Staff
Toronto, Canada — March 1, 2018 — Fenix Parts, a leading recycler and reseller of OEM parts and automotive products, has announced it has agreed to a merger with Stellex Capital Management. Under the terms of the deal, a Stellex-controlled affiliate will acquire the company for $0.51 per share in cash along with the assumption of more than $51 million in operating and long-term liabilities, including $42 million of indebtedness. The per share cash consideration under the merger represents a 56 percent premium on the 60-day volume-weighted average stock price, and was unanimously approved by the Fenix board.
The merger agreement is subject to shareholder approval, and a proxy statement will be mailed to shareholders shortly. The proxy statement and proxy card, as well as additional information about the transaction, will be accessible on Fenix’s website when it becomes available. The deal is expected to close in the second quarter of 2018.
Fenix chief executive officer, Kent Robertson, said “We are pleased to announce this definitive merger agreement with Stellex following a long and exhaustive strategic review process, which included multiple offers from both strategic and financial entities that ultimately fell apart.”
Fenix’s financial condition has been precarious due to a fire at the company’s Toronto facility last year which had left it short on funds, ultimately limiting its car buying power.
Earlier this month, news had broke that Upstate Shredding, a U.S.-based firm, had made an unsolicited offer to buy Fenix’s shares. After consideration, the board concluded that pursuing the offer, and the related lengthy due diligence process that would ensue, would jeopardize the advanced negotiations with Stellex.
“Due to all of these factors, the board believes this offer from Stellex represents the best opportunity for shareholders to maximize value,” said Robertson.
The Stellex offer followed months of extensive negotiation and due diligence, giving the board confidence that the proposed transaction with Stellex provided a better alternative for the company’s stockholders.
Fenix has also announced the resignation of two board members. After voting in favour of the merger, Thomas O’Brien stepped down due to a potential conflict related to his pending acceptance of another position at an industry-related company. In addition, Clayton Trier, a member of the Compensation Committee and head of the Audit Committee resigned two days earlier for what are described as personal reasons.
For more information visit fenixparts.com.
