AUBURN HILLS, Mich. - SPAR Group, Inc. (NASDAQ: SGRP), a global merchandising and marketing services provider, has announced a special meeting for stockholders to vote on its proposed acquisition by Highwire Capital. The all-cash transaction values SPAR Group at $2.50 per share, which is a 72% premium over its closing share price on August 30, 2024, the day before the merger agreement was announced.
The virtual meeting, where stockholders will cast their votes, is scheduled for Friday, October 25, 2024, at 12:00 p.m. Eastern Time. Stockholders as of October 1, 2024, are eligible to vote and have been urged by SPAR Group to participate actively to ensure their vote is counted. Those who have voted previously and do not wish to change their vote are not required to take further action.
SPAR Group's Board of Directors has unanimously approved the merger agreement, which also offers a 37.8% premium over the company's 30-day volume-weighted average share price. Upon successful completion of the merger, SPAR Group will become a privately held entity and its shares will cease trading on NASDAQ.
The definitive proxy statement regarding the merger was filed with the Securities and Exchange Commission (SEC) on October 2, 2024. Stockholders have been provided with various options to cast their vote, including by phone and internet, and may contact SPAR Group's proxy solicitor, D.F. King, for assistance.
Highwire Capital is known for integrating innovative technologies into traditional business models, aiming to transform middle-market businesses into platforms for growth and industry disruption.
This news article is based on a press release statement from SPAR Group, Inc. The information provided herein should be read in conjunction with the proxy statement and other relevant documents filed with the SEC by SPAR Group, which contain important details about the proposed acquisition.
In other recent news, SPAR Group, a global merchandising and marketing services provider, has agreed to a merger with Highwire Capital. However, Apollo Technology Capital Corp., a shareholder in SPAR, has voiced its intention to vote against this transaction due to concerns about Highwire's ability to secure financing and potential risks to SPAR if the deal falls through. Apollo Capital's main concerns revolve around the uncertainty of Highwire's financing and the requirement that SPAR's balance sheet cash be no less than $14.2 million at closing.
In response, Apollo Capital is urging the SPAR Board to provide complete and fair disclosure about Highwire's proposed financing and SPAR's closing balance sheet cash expectations. In the meantime, SPAR Group's shareholders are set to receive $2.50 in cash per share as part of the merger deal, which represents a significant premium over the company's recent share price. The merger, which has received unanimous approval from SPAR Group's Board of Directors, is expected to be completed in the fourth quarter of 2024, subject to approval by SPAR Group's shareholders and regulatory approvals.
These recent developments mark a significant turning point for SPAR Group as it navigates its future growth initiatives. However, the final outcome of the merger remains uncertain due to the concerns raised by Apollo Capital.
InvestingPro Insights
As SPAR Group (NASDAQ: SGRP) approaches its special stockholder meeting to vote on the proposed acquisition by Highwire Capital, InvestingPro data offers additional context to this significant corporate event.
The proposed acquisition price of $2.50 per share represents a substantial premium over recent trading prices, which aligns with SGRP's strong market performance. InvestingPro data shows that SGRP has delivered an impressive 164.49% price total return over the past year, with a 39.31% return in just the last six months. This robust performance may have contributed to Highwire Capital's interest in acquiring the company.
Despite the strong stock performance, SGRP's financials present a mixed picture. The company's revenue for the last twelve months as of Q2 2024 stood at $258.42 million, with a revenue growth decline of 2.41% over the same period. This aligns with an InvestingPro Tip indicating that analysts anticipate a sales decline in the current year.
However, SGRP maintains profitability with a gross profit of $51.78 million and an operating income of $8.82 million for the last twelve months as of Q2 2024. The company's P/E ratio of 4.51 suggests it may be undervalued relative to its earnings, which could be a factor in Highwire Capital's acquisition strategy.
InvestingPro Tips also highlight that SGRP operates with a moderate level of debt and its liquid assets exceed short-term obligations, potentially making it an attractive acquisition target. These insights, along with 8 additional tips available on InvestingPro, provide a more comprehensive view of SGRP's financial health and market position as stockholders prepare to vote on the acquisition.
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