>>Do you recall the exchange rate for the swap?
Yes, we ROTC shareholders appear to have been screwed without so much as a kiss. At last look, IHS was $32.25, so ROTC holders get $18.72. I think we got screwed at even the purported $22.61 value. Nonetheless, it should be accretive to IHS, and if we can quickly march back through $39 it may work out okay.
Under the terms of the agreement, IHS will issue 0.5806 shares of IHS common stock for each share of RoTech common stock currently outstanding. RoTech stockholders will receive approximately $22.61 in value in IHS common stock (based on the closing IHS stock price on July 3, 1997) for each share owned of RoTech common stock based on a fixed exchange rate. When the acquisition is consummated, IHS will issue approximately 15.8 million shares of common stock. The equity value of the acquisition is approximately $615 million, based on the exchange terms. The total value of the transaction including the assumption of RoTech's debt by IHS and other financial obligations, will approximate $915 million.
The merger is expected to be immediately accretive to IHS earnings per share. This transaction would also serve to strengthen the IHS balance sheet and reduce its leverage. Proforma for the acquisition, debt to total capitalization would be reduced from 65% (at March 31, 1997) to approximately 55%. |
