Cronos (NASDAQ:CRNS)
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The Cronos Group (Nasdaq:CRNS) announced today that it has entered into
a definitive asset purchase agreement with CRX Acquisition Ltd. (“CRX”),
a newly-formed company to be owned by certain members of Cronos’
current management team, FB Transportation Capital LLC (“FB
Transportation”) and third-party investors.
Under the agreement, CRX will purchase all of Cronos’
assets and assume all of Cronos’ liabilities
for a purchase price equal to $16.00 per share, determined on a
fully-diluted basis. The purchase price totals approximately
$133.7 million.
In connection with the sale, FB Transportation will purchase the
majority of CRX’s owned marine cargo
container assets acquired from Cronos. CRX will manage these assets and
other marine container assets owned by third parties. CRX will be
managed by Cronos’ current management team.
The assets sale and related matters are subject to approval by Cronos’
shareholders, the obtaining of certain third-party consents, and other
customary closing conditions. The acquisition is not subject to any
financing contingency. Cronos anticipates completion of the sale during
the summer of this year.
The Board of Directors of Cronos has unanimously approved the sale and
recommends that Cronos’ shareholders approve
the transaction at a special meeting of shareholders to be called to
consider the transaction.
Dennis J. Tietz (Chief Executive Officer and Chairman of the Board of
Cronos), Peter J. Younger (President, Chief Operating Officer, and a
director of Cronos), and S. Nicholas Walker, a director of Cronos, have
entered into support agreements with CRX to vote their shares (including
shares owned by affiliated entities), representing 19% of Cronos’
outstanding shares, in favor of the transaction.
As noted above, certain members of Cronos’
senior management will continue as the senior management of CRX, and
Peter J. Younger will become CRX’s Chief
Executive Officer.
Dennis J. Tietz, Chairman and CEO of Cronos, stated: “Cronos
is pleased to announce its agreement with CRX to sell the Company for a
purchase price equal to $16.00 per share. This transaction represents
the culmination of Cronos’ efforts, begun in
March 1999, when I assumed the position of Chairman and CEO, to
stabilize and grow the Company, rationalize our debt structure, and
broaden our product lines. In March of 1999, our stock was trading at
$4.79 per share. The subsequent increase in the price of our shares
reflects our success in achieving our objectives and our shareholders’
confidence in the Company.
“Cronos’ return to
profitability and this transaction could not have happened without the
support and guidance of our Board of Directors, the dedication and hard
work of Cronos’ employees, and the support of
our lenders, suppliers and customers.”
Cronos was advised by Raymond James & Associates, Inc. and Greene
Radovsky Maloney Share & Hennigh LLP.
CRX was advised by Fortis Securities LLC and Mayer, Brown, Rowe & Maw
LLP.
The Assets Sale And Proposed Liquidation
Under the asset purchase agreement, Cronos will sell all of its assets
to CRX for approximately $133.7 million in cash, and CRX will assume all
of Cronos’ liabilities. CRX’s
obligations under the agreement are supported by FB Transportation and a
guaranty from Fortis Bank S.A./N.V. Cayman Islands Branch. The purchase
price was negotiated to permit a distribution to the shareholders of
Cronos, in the liquidation of Cronos, equal to $16.00 per share, without
interest.
Cronos plans to file a proxy statement and a Schedule 13E-3 transaction
statement with the SEC containing more detailed information about the
proposed assets sale and other elements of the plan for the liquidation
and dissolution of Cronos following the assets sale. Following SEC
review of the proxy statement and Schedule 13E-3, Cronos will schedule
the extraordinary meetings of its shareholders required under Luxembourg
law and distribute the proxy statement.
About Cronos
Cronos (www.cronos.com) is one of
the world’s leading lessors of intermodal
containers, owning and managing a fleet of over 440,000 TEU (twenty-foot
equivalent units). The diversified Cronos fleet of dry cargo,
refrigerated and other specialized containers is leased to a customer
base of over 450 ocean carriers and transport operators around the
world. Cronos provides container-leasing services through an integrated
network of offices using state-of-the-art information technology.
About Fortis Merchant Banking
FB Transportation Capital LLC is an affiliate of Fortis Merchant
Banking. Merchant Banking is Fortis’
internationally operated wholesale bank with over 5,000 professionals.
Fortis Merchant Banking provides a wide range of financial products and
services for the needs of corporate clients and institutional investors.
In the U.S., Fortis Merchant Banking is active in global markets and
banking activities, and builds on its longstanding expertise in the
energy, commodities and transportation sectors. It has offices in New
York, Stamford, Jersey City, Denver, San Francisco, Chicago, Dallas,
Houston and Calgary. More information is available on www.merchantbanking.fortis.com.
Notice To Investors
This press release contains forward-looking statements concerning, among
other things, Cronos’ future prospects,
including (1) Cronos’ ability to
consummate the sale of its assets to CRX under the asset purchase
agreement; (2) Cronos’ ability to
continue to manage and expand its container leasing business pending
shareholder consideration of the asset purchase agreement and related
matters; and (3) Cronos’ ability to
renew and expand its existing lines of credit for the purchase of
containers, which Cronos anticipates will be fully drawn upon by the end
of March 2007. These statements are based upon certain assumptions that
Cronos cannot control and involve risks and uncertainties that could
cause actual results to differ from those anticipated. These statements
should be understood in light of the risk factors set forth in Cronos’
filings with the SEC, including those factors set forth in Cronos’
10-K report for the year ended December 31, 2005, and from time to time
in Cronos’ periodic filings with the SEC.
Except as otherwise required under Federal securities laws and the rules
and regulations of the SEC, Cronos does not have any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events, changes in assumptions,
or otherwise.
Additional Information About The Transactions
The proxy statement referred to above will be sent to Cronos’
shareholders in anticipation of the extraordinary meetings of
shareholders called to consider the transactions contemplated by the
asset purchase agreement. Shareholders may obtain a free copy of the
definitive proxy statement and other documents filed by Cronos with the
SEC, including the Schedule 13E-3, with the SEC at the SEC’s
website at www.sec.gov, or by directing
a request to Cronos as specified above.
Participants In The Transactions
Cronos and its directors and executive officers may be considered
participants in the solicitation of proxies from Cronos’
shareholders in connection with the proposed transactions. Information
about the directors and executive officers of Cronos, and their
ownership of Cronos’ common shares, is set
forth in the definitive proxy statement for Cronos’
2006 annual meeting of shareholders, dated April 25, 2006. Investors may
obtain additional information regarding the interests of such
participants by reading the proxy statement for the 2007 meetings of
shareholders when it becomes available.