Cubic Board OKs $3B Amended Acquisition Agreement With Veritas, Evergreen

Cubic Board OKs $3B Amended Acquisition Agreement With Veritas, Evergreen
Cubic

Cubic Corporation announced on Wednesday it has accepted a proposal from Veritas Capital and Evergreen Coast Capital to increase the price per share of their pending acquisition of Cubic to $75.00 per share in cash. By accepting the proposal, Cubic has entered into an amended agreement with Veritas and Evergreen.

The terms of the amendment to the previously announced definitive merger agreement with affiliates of Veritas stipulate that Cubic shareholders will receive $75.00 in cash for each share of the company's stock. This represents a premium of around 69% to Cubic unaffected closing stock price on Sept. 18, 2020, the last trading day before Cubic disclosed a possible merger. The all-cash transaction will be valued at approximately $3 billion. 

The Cubic board of directors considered a revised acquisition proposal from Singapore Technologies Engineering (ST Engineering) that offered to acquire Cubic for $78.00 per share. The board reviewed ST Engineering's offer but decided to go with the proposal of Veritas and Evergreen. 

In addition to choosing Veritas and Evergreen, the Cubic board approved and adopted the amended agreement. It also recommends that Cubic's shareholders adopt the new deal and vote for each proposal described in the proxy statement for the Special Meeting of Cubic's shareholders filed with the Securities and Exchange Commission (SEC).

The board also stated to its shareholders that the ST Engineering proposal was not a “superior proposal“ nor was it expected to lead to a better proposal. As such, Cubic has ceased all engagement with Singapore Technologies Engineering. 

The proxy statement was mailed to Cubic's shareholders on or around March 26th, 2021. The amended agreement summary is incomplete, and Cubic has encouraged its shareholders to read all of the amendments to be included with Cubic's current report on Form 8-K.

The special meeting of Cubic's shareholders to adopt the amended agreement is scheduled for April 27.

Raymond James & Associates provided the board with an opinion regarding the fairness, from a financial point of view, of the consideration offered to Cubic shareholders.

J.P. Morgan Securities serves as Cubic's lead financial adviser and Sidley Austin and Faegre Drinker Biddle & Reath are the legal counsel of the company. 

Veritas' legal counsel is Skadden, Arps, Slate, Meagher & Flom while Gibson, Dunn & Crutcher serves the same role for Evergreen.

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