GP Investments Acquisition Corp. (NASDAQ:GPIA) (NASDAQ:GPIAW)
(NASDAQ:GPIAU) ("GPIAC") today announced it has entered into a
definitive agreement to acquire WKI Holding Company, Inc. ("World
Kitchen"), the parent company of World Kitchen, LLC, a leading
multinational manufacturer and marketer of houseware products.
World Kitchen’s portfolio of brands includes Corelle, Pyrex,
CorningWare and Snapware, among others.
The anticipated initial enterprise value is
approximately $566 million, implying a multiple of 7.2x projected
calendar year 2016 adjusted EBITDA of $78 million, and post-closing
equity value of $330 million at $10.00 per share. In
connection with the acquisition, an affiliate of GP Investments,
Ltd. will co-invest $50 million in the form of new GPIAC common
stock at a price of $10.00 per share in cash. At consummation
of the transaction, GPIAC will move its jurisdiction of
incorporation from the Cayman Islands to the State of Delaware and
is expected to be renamed World Kitchen Group, Inc. and to continue
to trade on The NASDAQ Capital Market under the ticker symbol
"WDKN".
World Kitchen is a market leader in the
attractive global housewares segment. The company
manufactures and markets a diverse portfolio of iconic brands
across a broad range of product categories, including dinnerware,
bakeware, storage, cookware and cutlery. World Kitchen's
international footprint, distribution network, channel diversity
and strong relationships with key retail partners sustains its
leading positions in mature markets and positions it to drive
growth in select high-growth emerging markets. It employs
more than 3,000 people globally, including 2,300 in the United
States.
"World Kitchen presents a unique investment
opportunity, with significant long-term, high-growth potential,"
said Antonio Bonchristiano, CEO of GPIAC and GP Investments, Ltd.
"The company is a proven product innovator, with a diverse
international footprint across retail, online and other
channels. We believe the company will be well positioned to
continue and amplify the trend of organic growth, increase
efficiencies as the business continues to scale, and take advantage
of considerable sector consolidation opportunities."
“World Kitchen was seeking a strong,
growth-oriented financial sponsor with access to public capital
markets to partner with us in our next phase of growth,” said Carl
Warschausky, President and CEO of World Kitchen, LLC. “We are
excited to work with GP Investments, Ltd., which has a proven track
record of funding growth. We look forward to accelerated
organic growth and acquisitions in the years ahead.”
Transaction Details
Under the terms of the definitive agreement, the
acquisition will be funded through a combination of cash and the
issuance of approximately 6.5 million shares of GPIAC common stock
at $10.00 per share to World Kitchen's stockholders. The cash
component of the consideration is expected to be funded by a
combination of the cash in GPIAC's trust account established in
connection with its initial public offering, the issuance of 5
million shares of GPIAC common stock to an affiliate of GP
Investments, Ltd. and the proceeds of $275 million in new debt
being provided by Citigroup and BMO Capital Markets.
After giving effect to the transaction and
certain assumptions, GP Investments, Ltd. through its affiliated
entities will become the largest single stockholder with
approximately 28% pro forma ownership on a fully-diluted basis and
former World Kitchen stockholders will have approximately 20% pro
forma ownership. World Kitchen is expected to have an estimated $43
million cash balance to fund future growth post-transaction.
World Kitchen will have projected post-transaction net operating
leverage of 3.0x expected adjusted 2016 EBITDA.
The transaction, which has been approved by the
boards of directors of both companies, is subject to approval of
GPIAC shareholders and the satisfaction or waiver of customary
closing conditions, including regulatory approvals. The
transaction is expected to close in July 2016.
Citigroup served as GPIAC’s capital markets
advisor, UBS served as GPIAC’s financial advisor, and Duff &
Phelps served as financial advisor to the Special Transaction
Committee of the Board of GPIAC. Skadden, Arps, Slate,
Meagher & Flom LLP served as legal advisor to GPIAC.
Morgan Stanley & Co. LLC served as financial advisor, and
Latham & Watkins LLP and Davis Polk & Wardwell LLP served
as legal advisors to World Kitchen.
Conference Call and Investor
Presentation
GPIAC will hold a conference call to discuss the
transaction today at 10:00 a.m. ET. The conference call can be
accessed by dialing 855-327-6837 (domestic), or 631-891-4304
(international), and asking to join the GP Investments Acquisition
Corp. conference call. Interested investors and other parties may
also view the accompanying investor presentation filed today with
the Securities and Exchange Commission, and which can be viewed on
the SEC website at www.sec.gov. A replay of the call will be made
available and can be accessed by dialing 877-870-5176 (domestic),
or 858-384-5517 (international), and entering the conference ID
number 119290.
About GP Investments Acquisition
Corp.
GP Investments Acquisition Corp. (GPIAC) was
created by GP Investments in May 2015 via an IPO that raised $172.5
million in proceeds for the purpose of identifying attractive
investment opportunities in the United States or Europe, with a
focus on companies with long-term growth potential in the consumer
goods, services and retail sectors. The creation of GPIAC is
consistent with GP Investments' strategy of growing its assets
under management via expansion into different geographies and asset
classes, primarily in the form of permanent capital. The
Company's sponsor is GPIC, Ltd., a wholly owned subsidiary of GP
Investments, Ltd.
About GP Investments, Ltd.
GP Investments, Ltd. is a leading alternative
investments firm with more than 20 years' experience in corporate
investing. The company has a strong track record of
successful equity capital market transactions, delivering strong
returns and building long-lasting enterprises. Since its
inception, the company has raised approximately $5 billion from
international investors and has invested in more than 50 companies
across 15 sectors. In May 2006, GP Investments, Ltd.
completed its initial public offering (IPO), becoming the first
listed private equity firm in Brazil. For more information,
please see GP Investments Ltd.'s web site
www.gp-investments.com.
About World Kitchen
Headquartered in Rosemont, Ill., World Kitchen
and its affiliates manufacture and market products worldwide
through a portfolio of well-recognized and respected brands,
including under the Pyrex®, Corelle®, Corningware®, Snapware®,
Baker's Secret®, Chicago Cutlery® and Vintage Charm™
trademarks. World Kitchen's brands and products have a strong
reputation for quality, innovation, performance and durability.
World Kitchen and its affiliates employ approximately 3,000
people, and have major manufacturing and distribution operations in
North America and Asia-Pacific regions. Pyrex and CorningWare are
registered trademarks of Corning Incorporated, used under license
by World Kitchen. For more information, visit
http://www.worldkitchen.com.
Forward Looking Statements
Certain statements included in this
communication are not historical facts but are forward-looking
statements for purposes of the safe harbor provisions under The
Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as "may",
"should", "would", "plan", "intend", "anticipate", "believe",
"estimate", "predict", "potential", "seem", "seek", "continue",
"future", "will", "expect", "outlook" or other similar words,
phrases or expressions. These forward-looking statements include
statements regarding our industry, future events, the proposed
transaction between GPIAC and WKI, the estimated or anticipated
future results and benefits of GPIAC and WKI following the
transaction, including the likelihood and ability of the parties to
successfully consummate the proposed transaction, future
opportunities for the combined company, and other statements that
are not historical facts. These statements are based on the current
expectations of GPIAC and WKI management and are not predictions of
actual performance. These statements are subject to a number of
risks and uncertainties regarding GPIAC's and WKI's respective
businesses and the transaction, and actual results may differ
materially. These risks and uncertainties include, but are not
limited to, changes in the business environment in which GPIAC and
WKI operate, including inflation and interest rates, and general
financial, economic, regulatory and political conditions affecting
the industry in which WKI operates; changes in taxes,
governmental laws, and regulations; competitive product and pricing
activity; difficulties of managing growth profitably; the loss of
one or more members of GPIAC's or WKI's management team; the
inability of the parties to successfully or timely consummate the
proposed transaction, including the risk that the required
regulatory approvals are not obtained, are delayed or are subject
to unanticipated conditions that could adversely affect the
combined company or the expected benefits of the transaction or
that the approval of the stockholders of GPIAC and/or the
stockholders of WKI for the transaction is not obtained; failure to
realize the anticipated benefits of the transaction, including as a
result of a delay in consummating the transaction or a delay or
difficulty in integrating the businesses of GPIAC and WKI;
uncertainty as to the long-term value of GPIAC common stock;
the inability to realize the expected amount and timing of cost
savings and operating synergies; those discussed in GPIAC's Annual
Report on Form 10-K for the year ended December 31, 2015 under the
heading "Risk Factors," as updated from time to time by GPIAC's
Quarterly Reports on Form 10-Q and other documents of GPIAC on file
with the Securities and Exchange Commission ("SEC") or in the proxy
statement/prospectus that will be filed with the SEC by GPIAC.
There may be additional risks that neither GPIAC nor WKI presently
know or that GPIAC and WKI currently believe are immaterial that
could also cause actual results to differ from those contained in
the forward-looking statements. In addition, forward-looking
statements provide GPIAC's and WKI's expectations, plans or
forecasts of future events and views as of the date of this
communication. GPIAC and WKI anticipate that subsequent events and
developments will cause GPIAC's and WKI's assessments to change.
However, while GPIAC and WKI may elect to update these
forward-looking statements at some point in the future, GPIAC and
WKI specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing GPIAC's and WKI's assessments as of any date
subsequent to the date of this communication.
No Offer or Solicitation
This communication is not intended to and does
not constitute an offer to sell or the solicitation of an offer to
buy or an invitation to purchase any securities or the solicitation
of any vote or approval in any jurisdiction in connection with the
proposed business combination between WKI and GPIAC or otherwise,
nor shall there be any sale, issuance or transfer of securities in
any jurisdiction in contravention of applicable law.
Important Information For Investors And
Stockholders
In connection with the transactions referred to
in this communication, GPIAC expects to file a registration
statement on Form S-4 with the Securities and Exchange Commission
("SEC") containing a preliminary proxy statement of GPIAC that also
constitutes a preliminary prospectus of GPIAC. After the
registration statement is declared effective GPIAC will mail a
definitive proxy statement/prospectus to stockholders of GPIAC and
stockholders of WKI. This communication is not a substitute for the
proxy statement/prospectus or registration statement or for any
other document that GPIAC may file with the SEC and send to GPIAC's
stockholders and/or WKI's stockholders in connection with the
proposed transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders will be able to obtain free copies of the proxy
statement/prospectus (when available) and other documents filed
with the SEC by GPIAC through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
GPIAC will be available free of charge by contacting GPIAC at 150
E. 52nd Street, Suite 5003, New York, New York 10022, Attn:
Investor Relations.
Participants in the
Solicitation
GPIAC and WKI and their respective directors and
certain of their respective executive officers may be considered
participants in the solicitation of proxies with respect to the
proposed transactions under the rules of the SEC. Information about
the directors and executive officers of GPIAC is set forth in its
Annual Report on Form 10-K for the year ended December 31,
2015, which was filed with the SEC on March 28, 2016.
Additional information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will also be included
in the proxy statement/prospectus and other relevant materials to
be filed with the SEC when they become available.
Contacts:
Investors:
GP Investments, Ltd.
Joel La Banca Neto
+ 55 11 3556-5505
Media:
Finsbury
Kal Goldberg/Sara Evans/Chris Ryall
+1 646-805-2092
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