Watsco, Inc., Miami, and ACR Group, Inc.,
Houston, announced that they have executed a definitive merger agreement under
which Watsco will seek to acquire ACR’s outstanding common stock in a cash
tender offer of $6.75 per share.
With annual sales of $240 million in its most recent fiscal year, ACR is one of
the nation’s largest distributors of air-conditioning and heating products.
Founded in 1990, ACR is based in Houston and operates from 54 locations serving
over 12,000 air-conditioning and heating contractors throughout Florida, Texas,
California, Georgia, Tennessee, Arizona, Colorado, Louisiana, Nevada and New
Mexico. ACR has 503 employees and distributes a full line of air-conditioning
and heating equipment and related parts and supplies consisting of
approximately 20,000 skus. ACR ranked #7 inSupply House
Timesmagazine’s 2007 list of the top 50 HVAC distributors in the
United States. Additional information about ACR may be found on the Internet atwww.acrgroup.com. ACR trades on the American Stock Exchange
under the symbol “BRR.”
Albert Nahmad, Watsco’s president and CEO, commented, “We are very pleased to
welcome ACR’'s employees to the Watsco family. We recognize that ACR’s success
over the years is based on the strong relationships this organization has built
with HVAC contractors who want the very best service and a broad range of
products available at convenient locations. ACR will operate as a subsidiary of
Watsco under its present name and superb management team, and Watsco will
provide resources where needed to assist with ACR’s growth plans.”
Alex Trevino, Jr., ACR’s chairman and CEO, stated, “Watsco is the recognized
leader in the HVAC distribution industry. Al Nahmad has done a phenomenal job
building Watsco to its present size, and we are pleased to add ACR to the
stable of fine companies that comprise the Watsco family. Watsco’s culture of
allowing its business units to operate relatively autonomously while providing
support as needed to foster growth is synonymous with the business model that
we developed at ACR. With the resources of Watsco supporting us, our employees
should continue to thrive and sustain the dynamic growth rate that has characterized
our company in recent years.”
Watsco has agreed in the merger agreement to commence a tender offer for ACR’s
outstanding common stock as soon as practicable at a price of $6.75 per share,
a 42% premium to the 90-day average closing price. ACR’s board of directors has
unanimously recommended that ACR’s shareholders tender their shares in the
offer. Executive officers of ACR and their affiliates have agreed to support
this transaction and to sell shares representing approximately 26% of ACR’s
outstanding shares to Watsco for $6.75 per share. The completion of the tender
is conditioned upon the number of tendered ACR shares and the shares purchased
under the officers’ support agreements being at least 66-2/3% of ACR’s outstanding
shares, as well as regulatory approvals and other customary closing
requirements. Watsco reasonably believes it will obtain the necessary financing
for the transaction and expects to close the merger transaction in August 2007.
Houlihan Lokey Howard & Zukin is acting as financial advisor to ACR and has
rendered a fairness opinion to its Board of Directors with respect to the
tender offer and merger.
Watsco is the largest independent distributor of air conditioning, heating and
refrigeration equipment and related parts and supplies in the HVAC industry,
currently operating 385 locations serving over 40,000 customers in 32 states. Additional
information about Watsco may be found on the Internet atwww.watsco.com.
July 9, 2007 - Watsco to Acquire ACR Group, Inc.
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