Dover Saddlery has entered into a definitive merger agreement under which a company formed by Webster Capital will buy all of the outstanding shares of Dover common stock for $8.50 per share in cash and take Dover private.
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At closing all in-the-money stock options and warrants will be cashed out. Webster is partnering with QIC, one of Webster's largest institutional investors, to provide equity financing.
The Dover board has unanimously approved the merger agreement and recommended that Dover's stockholders vote to approve the transaction.
The offer represents a significant premium over Dover's current share price. The transaction is expected to close in the second quarter of fiscal 2015, subject to customary closing conditions, including stockholder approval.
Stephen L. Day, CEO and chairman of the board of Dover, said, "We are very pleased that the merger agreement we have negotiated with Webster will, upon closing, produce tremendous value for our shareholders. As the leading omni-channel retailer in the equestrian industry, we are excited and looking forward to partnering with Webster to grow our retail store base and pursue other exciting expansion plans.
"Dover and its employees and customers will benefit from this partnership with Webster, which has extensive experience and business connections in the retail and direct-to-consumer sectors.
"With our long-standing customer relationships and excellent management team, Dover fits well with Webster's interest to invest in leading direct-to-consumer companies and help these companies accelerate their growth and evolution. We feel that this will be a win-win outcome for all constituents."
Donald Steiner, managing partner of Webster Capital, stated, "We are excited about the opportunity to work with Dover's management to help Dover achieve its full potential. Webster will support Dover's strategy to expand its retail store base as well as its catalog and internet marketing programs of quality equestrian products for both the horse and the rider."
In connection with the execution of the merger agreement, Stephen Day and other certain directors and a member of Dover's management team, who currently own approximately 25% of Dover's outstanding shares, have agreed to vote their shares in favor of the merger. ■