Veritiv Corporation told investors it has agreed to be acquired by an affiliate of Clayton, Dubilier & Rice (CD&R) for $170 per share, sending its shares nearly 20% higher in Monday morning trading.
The Atlanta-headquartered company, which distributes packaging, facility solutions and print products, said the offer from CD&R comes at a 31% premium to the 30-day volume-weighted average price of its shares, valuing the company at $2.3 billion.
Veritiv's board of directors has unanimously voted to approve the transaction and recommends that shareholders vote in favor of the transaction, it said in a statement.
Describing the deal as a “pivotal moment” in the company’s history, Veritiv CEO Sal Abbate commented: "CD&R's interest in our company is a testament to our team's hard work, innovation, and dedication.
“Fueled by this partnership, we will continue to evolve towards our greatest potential, delivering innovative and sustainable solutions to our customers today – and into the future.”
Veritiv noted that the transaction remains subject to shareholder approval and other customary closing conditions, including the receipt of required regulatory approvals. It is expected to close in the fourth quarter of 2023.
Funds managed by The Baupost Group, Veritiv’s largest shareholder, have entered into a Support Agreement under which they have agreed to vote their shares in favor of the transaction.
"The Veritiv management team has successfully executed on its multi-year strategy to drive significant growth and they have built substantial value in the business, which is reflected in the premium paid for the shares,” added Greg Ciongoli, partner at Baupost.
“Combined with CD&R's business-building expertise, we believe Veritiv's future is very bright."
Contact the author at stephen.gunnion@proactiveinvestors.com