IDIS Co., Ltd. and Costar Technologies Inc. announced the execution of a definitive agreement and plan of merger under which Costar will be acquired by IDIS in a merger transaction.
Merger Agreement
The Merger Agreement has been unanimously approved by the boards of directors of each of IDIS and Costar. Completion of the Merger will be subject to approval by the stockholders of Costar.
The board of directors of Costar has recommended that Costar stockholders approve the transaction and adopt the Merger Agreement at a special meeting of the stockholders of Costar to be called in connection with the merger transaction.
Merger details
Stockholders collectively holding approximately 45% of the outstanding shares of Costar common stock
Stockholders collectively holding approximately 45% of the outstanding shares of Costar common stock have entered into voting and support agreements under which they have agreed, among other things, to vote their shares of Costar common stock in favour of the merger transaction.
The merger is expected to close during the second quarter of 2023, subject to approval by the Costar shareholders and the satisfaction of customary conditions to closing.
Purchase price adjustments
Under the Merger Agreement, IDIS will pay approximately $23.2 million, subject to customary purchase price adjustments, inclusive of approximately $13.0 million to retire Costar's bank debt and with the remainder going to the holders of Costar common stock and vested options after payment of transaction expenses.
After debt, transaction expenses, and adjustments, it is expected that Costar stockholders will receive approximately $5.00 to $5.38 per share, representing an 11% to 20% premium to Costar's average share price over the last twelve months and a 4% to 12% premium to Costar's closing price on March 22, 2023. The acquisition will be funded by the existing cash reserves of IDIS.
Leveraging Costar's channels
IDIS CEO, Mr. Kim Young-Dal, said "Leveraging Costar's established distribution networks and sales channels in the U.S. gives a significant boost to IDIS' growth strategy, which is founded on building long-term relationships with systems integrators. With this acquisition, IDIS will diversify and synergise its presence in the government sector and intelligent transportation systems."
"Driving our business in these, previously hard-to-penetrate areas and expanding into new markets, will provide a foundation for building our business not only in the U.S. but globally."
Enhanced solutions
With access to IDIS's entire range of advanced technologies, we can deliver enhanced services"
Scott Switzer, CEO of Costar said, "We are extremely excited to be uniting with IDIS. As Costar's largest supplier, their success in the security industry combined with their engineering expertise have made them a prized partner over the years."
"Now, with access to their entire range of advanced technologies and resources, we can deliver enhanced solutions and services to our customers."
Wholly-owned subsidiary
IDIS will continue using the Costar name, with Costar becoming a wholly-owned subsidiary of IDIS. The present Costar management team and employees are expected to join IDIS following the closing of the acquisition. Scott Switzer will continue in his role as CEO.
The exclusive financial advisor for IDIS is NMC Resource Corporation and for Costar is Imperial Capital. Legal advisors for IDIS are McMillan LLP and Costar DLA Piper.
- Network / IP
- Campus security systems
- Industrial security
- Commercial security
- Security management
- Security devices
- Security installation
- Security tagging
- Security cameras
- PTZ cameras
- Security camera systems
- Security monitoring system
- Industrial security systems
- Network cameras
- Security software
- Security service
- Industrial surveillance
- Bullet cameras
- Box cameras
- Indoor surveillance
- Integration software
- Corporate Security
- Indoor Security
- Central Monitoring
- Warning Devices
- Mergers & Acquisitions
