Special to the
ALCO Stores, Inc., announced a proposed merger with Argonne Capital Group, LLC, Thursday.
Under the terms of the merger agreement, Argonne will acquire all the outstanding shares of ALCO Stores’ common stock for $14 per share in cash. This price represents a premium of approximately 63 percent to ALCO’s share price on July 24, 2013, the last trading day prior to ALCO’s announcement of the transaction contemplated by the merger agreement, according to a press release.
The cash price for ALCO shares in the proposed transaction totals approximately $47 million.
ALCO’s stock closed at $8.58 but jumped 62 percent to $14 a share when the announcement was made, Bryce Koehn, financial adviser of Edward Jones, said.
ALCO is a general merchandise retailer, and Argonne is a private investment firm based in Atlanta, Georgia.
The independent members of ALCO Stores’ Board of Directors have unanimously approved the merger agreement and recommended that ALCO Stores’ shareholders approve the transaction.
“Argonne Capital is very selective in its acquisition process and focuses on companies that have strong growth potential,” Royce Winsten, chairman of the Board of ALCO, stated. “We are proud of ALCO’s CEO Rich Wilson and his management team, and how they have positioned the Company for growth. We believe Argonne will help ALCO grow and achieve the goals management and the Board have established for the Company.”
Rich Wilson, chief executive officer, commented: “ALCO Stores has a unique model for providing an attractive merchandise selection and exceptional value to consumers in underserved communities in small-town America. Our associates are supportive of the new brands, variety and value we offer shoppers -- as well as the operational improvements behind the scenes. ALCO looks forward to partnering with Argonne, and we believe the support they will provide will accelerate the Company’s plans for sustained growth.”
Argonne Founder and President Michael Klump added, “We are excited about the opportunity to acquire ALCO Stores, which is a strongly-positioned business that has taken the right steps to move the Company forward in today’s highly competitive retail environment. The acquisition of ALCO would be a clear strategic fit within our existing portfolio of companies and real estate investments serving the dining and retail needs of everyday Americans.”
The merger, which is expected to close later this year, is subject to approval from ALCO’s shareholders and other customary closing conditions.
Argonne is a private investment firm founded in 2003 that seeks to acquire and grow companies primarily within the restaurant and retail industries that will benefit from the firm’s capital resources, operational expertise and extensive real estate knowledge and capabilities.
Today, Argonne operates or franchises over 775 restaurants under brands such as IHOP, Applebee’s, Krystal and Stevi B’s Pizza. Spanning 14 states, Argonne’s restaurant portfolio employed over 20,000 people and generated in excess of $1 billion in annual system sales in fiscal year 2012.