Kansas City, KS-based Epiq Systems, Inc., a leading global provider of integrated technology and services for the legal profession, announced that it has entered into a definitive agreement to sell to OMERS Private Equity, the private equity arm of the OMERS pension plan, and funds managed by Harvest Partners, LP, a leading middle-market private equity fund, for $16.50 per share in cash. The transaction, which represents a 42% premium to Epiq’s unaffected closing share price of $11.63 as of February 19, 2016, the last trading day before a media report speculating about potential offers for the company, has a total value of approximately $1 billion, including assumed debt obligations.
The Epiq board of directors unanimously approved the transaction and recommends that Epiq shareholders vote in favor of the transaction. Under the terms of the agreement, upon the closing of the transaction, Epiq shareholders will receive $16.50 in cash for each share of Epiq’s common stock. Upon completion of the transaction, Epiq will become a privately held company majority-owned by OMERS and managed by OMERS Private Equity.
The proposed transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions, including receipt of shareholder and regulatory approvals. The transaction requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of Epiq’s common stock entitled to vote on the transaction, which will be sought at a special meeting of Epiq’s shareholders. Each of St. Denis J. Villere & Company LLC and P2 Capital Partners,LLC, the two largest shareholders of the company, Tom W. Olofson, founder, chairman and chief executive officer of the company, and the company’s directors and other executive officers have signed voting support agreements in support of the transaction, representing approximately 38% of the total issued and outstanding shares of common stock of the company.
Douglas M. Gaston, the chairman of the Strategic Alternatives Committee of the Epiq Board of Directors, commented, “This transaction represents the successful culmination of a comprehensive review of strategic and financial alternatives to maximize value for all of Epiq’s shareholders. After careful consideration, the Board determined that this transaction with OMERS Private Equity and Harvest Partners represents the highest and best offer received, offering Epiq shareholders at closing with immediate cash value at a substantial premium.”
Olofson said, “We believe this transaction is in the best interest of our shareholders, clients, associates and business partners. OMERS Private Equity and Harvest Partners are two experienced and world-class investors that have an extensive understanding of the legal technology solutions and services industry. Our management team and colleagues look forward to the new opportunities for growth with DTI.”
Eric Haley, managing director of OMERS Private Equity, said, “Epiq and DTI are both recognized as excellent service providers and market innovators. This combination will produce a global firm with best-in-class solutions and significant opportunities for growth in the dynamic legal technology industry.” Michael Graham, Head of North America of OMERS Private Equity added, “This combination is indicative of the confidence we have in the DTI platform and the future of the legal process outsourcing industry and we are excited to partner with the Epiq team to enhance the growth of these two exceptional companies.”
“We are excited to invest in this combination of two global legal technology solutions and services companies,” said Andrew Schoenthal, managing director of Harvest Partners. “We are looking forward to once again partnering with John Davenport, Jr., and DTI, and have great respect for Epiq and what they have accomplished,” added Ira Kleinman, senior managing director of Harvest Partners.