Granahan Mccourt Acquisition Corp. (AMEX:GHN.U)
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Granahan McCourt Acquisition Corp. (AMEX: GHN, GHN.U, GHN.WS) (“Granahan
McCourt”) today announced that it has entered
into an amendment to the Agreement and Plan of Merger, dated as of April
24, 2008, with Pro Brand International, Inc. (“PBI”),
a leading designer and developer of advanced antenna and radio frequency
systems for the satellite industry, primarily serving Direct Broadcast
Satellite (“DBS”)
operators.
Under the terms of the amendment, the initial purchase price for PBI has
been reduced to $65 million in the aggregate, including $50 million in
cash and $15 million in stock, down from $75 million in the aggregate,
consisting of $55 million in cash and $20 million in stock, resulting in
a 13% reduction in the initial merger consideration. The amendment also
reduces and simplifies the contingent earnout payments to PBI
shareholders. These revised payments will permit a maximum contingent
earnout payment of $12 million per year, for a total contingent payout
capped at a cumulative maximum of $36 million. This implies a reduction
in total consideration of approximately 55% when compared to the high
end and 20% when compared to the low end of the earnout range previously
disclosed in Granahan McCourt’s public
filings. In addition, the amendment grants Granahan McCourt full
flexibility regarding the mix of stock versus cash used for payment of
the earnout to PBI shareholders.
The amendment also provides that, as a condition to the closing of the
merger, members of Granahan McCourt’s
management enter into restriction agreements pursuant to which transfer
restrictions and forfeiture provisions are imposed on approximately 2.6
million shares, which represent all of Granahan McCourt’s
common stock first acquired by management prior to Granahan McCourt’s
initial public offering. As a result of these restriction agreements,
those shares will become transferable and non-forfeitable directly
proportional to and only to the extent that PBI’s
shareholders and option holders become eligible for earnout payments on
the terms set forth in the amendment.
“We are extremely pleased to have
renegotiated our merger agreement with PBI,”
stated David McCourt, President, CEO and Chairman of the Board of
Granahan McCourt. “Under this new structure,
Granahan McCourt’s management equity in the
combined company will be subject to restrictions until we execute on our
multi-pronged growth strategy, which includes international expansion,
leveraging PBI’s design capabilities into
adjacent verticals, and pursuing attractive acquisition opportunities.
We believe tying our promote to performance milestones is a testament to
our long-term commitment to PBI and the confidence we have in our
ability to execute our growth strategy and build shareholder value.”
“This amendment enhances the attractiveness
of this transaction for Granahan McCourt’s
shareholders by lowering the purchase price and leaving additional cash
on the balance sheet to fund future growth initiatives,”
continued David McCourt. “We are confident
that the implementation of our strategic initiatives will drive EBITDA
growth and customer diversification. We believe this will result in
expanded multiples more in line with our comparables, thus further
enhancing upside to our investors in a short period of time.”
About Granahan McCourt Acquisition Corporation
Granahan McCourt Acquisition Corporation is a blank check company
organized on July 10, 2006 for the purpose of acquiring one or more
assets or operating businesses in the telecommunications and media
industries through a merger, capital stock exchange, asset or stock
acquisition or other similar business combination. Granahan McCourt
Acquisition Corporation does not have significant operations.
Forward-Looking Statements
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. We have
based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements are
subject to known and unknown risks, uncertainties and assumptions about
us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may,”
“should,” “could,”
“would,” “expect,”
“plan,” “anticipate,”
“believe,” “estimate,”
“continue,” or the
negative of such terms or other similar expressions. Factors that might
cause or contribute to such a discrepancy include, but are not limited
to, those described in our other Securities and Exchange Commission
filings, including the Company’s registration
statement on Form S-4 (File No. 333-150848), as amended (the “Registration
Statement”) and Form 10?K
for the period ended December 31, 2007. These risks and uncertainties
also include risks and uncertainties regarding PBI, including, among
other things, changes in demand for PBI’s
products, PBI’s dependence on significant
customers, the lack of long-term contracts governing PBI’s
customer and supplier relationships, PBI’s
ability to retain its management and key personnel, PBI’s
ability to adequately protect its intellectual property and its
technologies, competition in PBI’s markets,
competitive pricing and continued pricing pressures in the DBS market,
supplier constraints, the introduction of new products and services by
competitors, the ability of PBI to manage costs and maintain production
volumes, conditions in PBI’s industry and
economic conditions generally, PBI's ability to develop and market new
technologies in a competitively advantageous manner, and PBI’s
success at integrating acquired businesses.
Additional Information and Where to Find It
In connection with the proposed merger and required stockholder
approval, Granahan McCourt has filed the Registration Statement,
including a combined proxy statement/prospectus with the SEC in
connection with the merger and will mail a definitive proxy statement to
the stockholders of Granahan McCourt containing information about the
merger. Granahan McCourt’s stockholders are
urged to read the proxy statement and other relevant materials when they
become available as they will contain important information about the
merger with PBI. Granahan McCourt’s
stockholders will be able to obtain a free copy of such filings at the
Securities and Exchange Commission’s internet
site (http://www.sec.gov). Copies of
such filings can also be obtained, without charge, by directing a
request to Granahan McCourt, 179 Stony Brook Road, Hopewell, NJ 08525.
Granahan McCourt and its officers and directors may be deemed to have
participated in the solicitation of proxies from Granahan McCourt’s
stockholders in favor of the approval of the merger. Information
concerning Granahan McCourt’s directors and
executive officers is set forth in the publicly filed documents of
Granahan McCourt. Stockholders may obtain more detailed information
regarding the direct and indirect interests of Granahan McCourt and its
directors and executive officers in the merger by reading the
preliminary and definitive proxy statements regarding the merger, which
will be filed with the SEC.