A company controlled by the chair and president of Rocky Mountain Equipment (RME) has entered an agreement to buy the large publicly-traded farm equipment dealership chain, and take it private.
AcquireCo, a company created by Matthew Campbell, chair of the board of directors of RME, and Garrett Ganden, president and CEO of RME, has entered into an agreement to acquire all of the issued and outstanding common shares of RME, for $7 per share in cash.
This represents a 26.8 per cent premium to RME’s closing share price on the TSX on October 30, 2020, and values RME at $135 million on an equity basis and at $188 million on an enterprise basis, including debt and lease obligations.
RME is the largest independent agricultural equipment dealer in Canada and the second largest Case IH dealer in North America, operating 36 dealerships across Alberta, Saskatchewan, and Manitoba.
A special committee of independent directors reviewed and evaluated the terms of the proposal from AcquireCo, according to RME. This committee unanimously recommended the arrangement to the company’s board. The board (with interested and non-independent directors abstaining) subsequently approved the arrangement and has recommended shareholders vote in favour of the sale.
The sale requires approval of at least two-thirds of the votes cast, in person or by proxy, by shareholders, and is also subject to all the normal court, regulatory and material third party approvals, the company says. The arrangement is not subject to a financing condition.
The company says directors and officers of RME who control 13.6 per cent of the company’s shares have entered into agreements to support the sale to AcquireCo.
A special meeting of holders of shares to consider the sale is expected to be held in person or virtually in December 2020.
RME has a limited time to accept competing offers, however, AcquireCo has the right to match any other offer.