Aegion Corp. announced Feb. 16 that it entered into a definitive merger agreement with affiliates of New Mountain Capital LLC, (NMC) in a transaction valued at approximately $963 million that will result in Aegion becoming a private company.
“We are pleased to reach this agreement with New Mountain, which is in the best interests of Aegion stockholders and enables them to realize immediate value at a significant cash premium for their investment,” said Stephanie Cuskley, chairwoman of the Aegion Board. “Following a comprehensive evaluation of potential value-creation opportunities with our independent advisors over the last several years, the Board unanimously approved this transaction with New Mountain, which has a proven track record of supporting businesses through investments in R&D and capital expenditures that recognize the value of achieving differentiated long-term growth.”
“Over the past several years, we have actively reshaped Aegion into a more streamlined and focused company. This transaction provides stockholders a premium valuation, recognizes the value our team has created and represents a new chapter for our company,” said Charles R. Gordon, Aegion’s president and CEO. “As a private company, we will have the resources and long-term approach to build on our progress and further enhance our differentiated portfolio of technologies. We have met with the New Mountain team several times in recent years and are confident in their focus on supporting our business, our people and achieving our long-term goals. We look forward to working together with New Mountain as we continue to deliver transformational solutions to maintain, rehabilitate and protect critical infrastructure around the world.”
Under the terms of the agreement, the buyer will acquire all outstanding shares of Aegion common stock for $26 per share in cash. This represents a premium of approximately 21 percent over Aegion’s closing stock price of $21.45 on Feb. 12, 2021, the last trading day prior to the Feb. 16 announcement and a premium of approximately 28 percent to Aegion’s 30-day volume weighted average price as of Feb. 12. The transaction, which was unanimously approved by the Aegion Board of Directors, is expected to close in the second quarter of 2021.
“We have long admired Aegion, its management team and talented employees, and we believe New Mountain can bring the key ingredients Aegion needs to continue on its successful trajectory,” said Harris Kealey, managing director at New Mountain Capital. “By combining Aegion’s existing strengths with our experience identifying and investing in high-quality growth businesses that provide infrastructure services, protection and maintenance across water, power and broad infrastructure assets, such as Inframark, Pearce Services and TRC Companies, Aegion will be well-positioned to advance its client offerings and technological capabilities through continued investments in its business. This will lead to new opportunities for employees and development of innovative solutions that protect communities and their infrastructure.”
Gordon will remain with the company through the completion of the transaction to ensure a smooth ownership transition and continuity of operations. The acquisition recognizes the long and successful heritage of Aegion in St. Louis and in the many communities where Aegion and its subsidiaries operate across the globe. The talented management team and loyal employee base are critical to the day-to-day success of the company, and there is no expectation to relocate the headquarters away from the metropolitan area. New Mountain also expects to maintain Aegion’s significant presence in its field offices around the world.
Upon the close of the transaction, New Mountain will review the previously announced sales process for Aegion’s Energy Services segment and determine what best positions the business for long-term success.
Transaction Details, Path to Completion
The transaction is expected to close in the second quarter of 2021 and is subject to Aegion stockholder approval, regulatory approvals and other customary closing conditions. The transaction is being financed through a combination of equity from affiliates of New Mountain and debt being provided by a combination of Jefferies, Credit Suisse and Deutsche Bank Securities Inc.
The Aegion Board of Directors recommends that Aegion stockholders approve the proposed merger and merger agreement. Aegion expects to hold a Special Meeting of Stockholders to consider and vote on the proposed merger and merger agreement as soon as practicable after the mailing of the proxy statement to its stockholders. Upon completion of the transaction, Aegion will become a privately held company and shares of Aegion common stock will no longer be listed on any public market.
Centerview Partners LLC is serving as exclusive financial advisor to Aegion, and Shearman & Sterling is serving as legal counsel. Jefferies and Houlihan Lokey are serving as financial advisors to New Mountain Capital, and Ropes & Gray is serving as legal counsel.