BlueLinx Holdings gave notice in an SEC filing today that it had entered into an agreement with Cerberus Capital Management and one of its units to buy the 45% of shares in BlueLinx that Cerberus doesn't already own.
BlueLinx officials signed on to the deal after Cerberus raised its offer to $4 per share from the previous $3.40. With roughly 14.6 million shares owned by people other than Cerberus, that higher price values the deal at $58.4 million.
That $4-a-share offer by Cerberus and its Cerberus ABP Investor LLC (CAI) unit is good until midnight ET Friday, Oct. 8.
Aside from raising the bid price, Cerberus also made several other commitments that helped lead to BlueLinx accepting the buyout bid:
- If Cerberus ends up with fewer than 90% of the outstanding shares by the end of its offer period, CAI and Cerberus Capital will make a subsequent offering lasting no less than five business days.
- In the period between when the offer reaches the 90% threshold and Cerberus acquires the rest of the oustanding shares, Cerberus will seek to maintain BlueLinx's status as a public comany by listing them on the New York Stock Exchange or its equivalent. BlueLinx also will maintain a board with at least three independent directors during that period, and the company won't make any other deals unless a majority of those independent directors approves the idea.
Based in Atlanta, BlueLinx provides products from more than 750 suppliers to 11,500 customers nationwide. It reported on Aug. 5 a net loss of $3.4 million for the second quarter, swinging from a year-earlier profit of $600,000. That loss occurred despite a 27.7% increase in revenues to $540.8 million.