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GTSI Corp. (GTSI) To Be Taken Private For $7.75/Shr, 47.9 Pct Premium

 May 07, 2012 08:12 AM

(By Balaseshan) GTSI Corp. (NASDAQ:GTSI), a seller of IT products and solutions to governments, said it agreed to be bought through a cash tender offer at $7.75 per share by an affiliate of UNICOM Systems Inc. in a transaction with an expected total value of about $76.67 million.
The announcement sent GTSI's shares surging 47.90% in premarket trading on Monday.

The per share purchase price of the tender offer represents a premium of about 47.9% over GTSI's closing stock price as of May 4 of $5.24.

A subsidiary of UNICOM would commence a cash tender offer to buy GTSI's outstanding shares of common stock at $7.75 per share. The closing of the tender offer is expected to occur in the second or early third quarter of 2012.

Under the terms of the agreement, which was unanimously approved by a special committee of independent GTSI directors and GTSI's full Board of Directors, the tender offer is not subject to any financing contingencies.

The definitive merger agreement provides for the parties to effect, subject to customary conditions, a merger following the completion of the tender offer, which will result in all shares not tendered in the tender offer being converted into the right to receive $7.75 per share in cash. Upon completion of the merger, GTSI will become a private company, wholly owned by UNICOM.

Under the terms of the definitive merger agreement, GTSI is permitted to solicit alternative acquisition proposals from third parties through June 6 and intends to consider any such proposals. There can be no assurance that the solicitation of such proposals will result in an alternative acquisition transaction.

It is not anticipated that any developments will be disclosed with regard to this process unless GTSI's board of directors makes an affirmative decision to proceed with an alternative acquisition proposal.

GTSI's largest shareholder, Linwood (Chip) Lacy, who is also a director, a related entity, and another director have entered into stockholder tender agreements in support of the transaction. Lacy and such related entity beneficially own about 17% of GTSI's common stock.

As a result of entering into the definitive merger agreement, GTSI is postponing its 2012 annual meeting of stockholders indefinitely.

Raymond James & Associates, Inc. is acting as exclusive financial advisor to GTSI. Holland & Knight, LLP is acting as legal advisor to GTSI and its Board of Directors. Stout Risius Ross, Inc. provided a fairness opinion to GTSI's Board of Directors and the special committee.

GTSI closed Friday's regular session down 1.13% at $5.24. The stock has been trading between $3.81 and $7.73 for the past 52 weeks.



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