SPAR Group Affirms Intent to Close Highwire Merger

Rhea-AI Summary

SPAR Group (NASDAQ: SGRP) has reaffirmed its commitment to close the proposed acquisition by Highwire Capital, following stockholder approval on October 25, 2024. The all-cash transaction, valued at $2.50 per share, was unanimously approved by SPAR Group's Board of Directors. The merger agreement, initially announced on August 30, 2024, involves SGRP, Highwire Capital, and Highwire Merger Co. I, Inc.

Highwire Capital's CEO Rob Wilson confirmed their commitment to completing the transaction, noting that the lender commitment letter's expiration date has been extended from December 15, 2024, to January 15, 2025, allowing time to address final lender requirements.

Positive

• Stockholder approval secured for the merger on October 25, 2024
• All-cash transaction offering $2.50 per share to stockholders
• Lender commitment letter extended to January 15, 2025

Negative

• Merger closing delayed due to pending lender requirements
• Extended timeline suggests potential financing complexities

Insights

Financial Analyst

The merger affirmation and financing extension represent critical developments for SPAR Group's $2.50 per share acquisition by Highwire Capital. With a current market cap of $41.5M, this all-cash transaction provides shareholders with a clear exit opportunity. The extension of the commitment letter to January 15, 2025, while indicating some delays in meeting lender requirements, demonstrates continued progress toward deal completion. The transaction has already cleared a major hurdle with stockholder approval in October. Key positive indicators include management's affirmation of business performance and favorable stakeholder response. However, investors should note that the extended timeline and pending lender requirements introduce some execution risk until final closing.

Legal Expert

The public reaffirmation of merger intent by both parties carries significant legal weight, particularly in response to stakeholder inquiries. The detailed disclosure of the commitment letter extension and explicit statements from both CEOs helps maintain transparency and compliance with securities regulations. The merger structure remains intact with Highwire Merger Co. I, Inc. as the acquisition vehicle. The stockholder approval obtained on October 25 satisfies a important legal requirement. The extension of the lender commitment letter to January 15, 2025, has been properly disclosed, maintaining regulatory compliance. This transparency helps mitigate potential legal risks associated with merger uncertainty.

• Stockholders Approved Merger on October 25, 2024
• $2.50 Per Share Merger Consideration
• Unanimously Approved by SPAR Group Board of Directors
  

AUBURN HILLS, Mich., Dec. 11, 2024 (GLOBE NEWSWIRE) -- SPAR Group, Inc. (NASDAQ: SGRP) (“SGRP”, “SPAR Group” or the “Corporation”), a provider of merchandising, marketing and distribution services, in response to media and investor inquiries, affirms intent to close the proposed acquisition (the “Proposed Acquisition”) by Highwire Capital.

As previously announced, SPAR Group entered into the Agreement and Plan of Merger, dated August 30, 2024, by and among SGRP, Highwire Capital and Highwire Merger Co. I, Inc., a wholly owned subsidiary of Highwire Capital, whereby SPAR Group is to be acquired by Highwire Capital in an all cash transaction. SPAR Group’s stockholders approved the transaction in a special meeting conducted on October 25, 2024.

“We remain committed to completing this transaction and delivering value to our shareholders,” said Mike Matacunas, President and CEO of SPAR Group. “We are also excited about the performance of our business and the favorable response from clients, partners and employees to this merger.”

“Highwire Capital is committed to the completion of this transaction,” said Rob Wilson, CEO of Highwire Capital. “We are addressing final lender requirements and expect to close soon. The commitment letter with our lenders, which had an expiration date of December 15, 2024, has been extended to January 15, 2025 to allow time for the completion of the remaining requirements.”

About Highwire Capital

Highwire Capital transforms middle-market businesses by integrating innovative technologies with traditional operating models. By driving efficiency and fostering industry advancements, Highwire Capital revitalizes established entities into leading platforms for disruption and growth.

About SPAR Group, Inc.

SPAR Group is an innovative services company offering comprehensive merchandising, marketing and distribution solutions to retailers and brands. We provide the resources and analytics that improve brand experiences and transform retail spaces. We offer a unique combination of scale and flexibility with a passion for client results that separates us from the competition.

Forward-Looking Statements

This press release (this “Press Release”) contains “forward-looking statements” within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, made by, or respecting, the Corporation. Forward-looking statements include information concerning the Proposed Acquisition. “Forward-looking statements” are defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and other applicable federal and state securities laws, rules and regulations, as amended.

All statements (other than those that are purely historical) are forward-looking statements. Words such as “may,” “will,” “expect,” “intend,” “believe,” “estimate,” “anticipate,” “continue,” “plan,” “project,” or the negative of these terms or other similar expressions also identify forward-looking statements. Forward-looking statements made by the Corporation in this Press Release may include (without limitation) statements regarding: risks, uncertainties, cautions, circumstances and other factors (“Risks”). Those Risks include (without limitation): the impact of the news of the Proposed Acquisition or developments in it; the nature, cost and outcome of any legal proceedings related to the Proposed Acquisition; uncertainty of satisfaction of closing conditions respecting the Proposed Acquisition; the impact of the Corporation’s continued strategic review process, or any resulting action or inaction, should the Proposed Acquisition not occur; the impact of selling certain of the Corporation’s subsidiaries or any resulting impact on revenues, earnings or cash; the impact of adding new directors or new finance team members; the potential n continuing negative effects of the COVID pandemic on the business of the Corporation and its subsidiaries (collectively, the "Company"); the Corporation’s potential non-compliance with applicable Nasdaq director independence, bid price or other rules; the Company’s cash flow or financial condition; and plans, intentions, expectations, guidance or other information respecting the pursuit or achievement of the Corporation’s corporate objectives.

You should carefully review and consider the Company’s forward-looking statements (including Risks and other cautions and uncertainties) and other information made, contained or noted in or incorporated by reference into this Press Release, but you should not place undue reliance on any of them. The results, actions, levels of activity, performance, achievements or condition of the Company (including its affiliates, assets, business, clients, capital, cash flow, credit, expenses, financial condition, foreign exchange, income, liabilities, liquidity, locations, marketing, operations, performance, prospects, revenues, sales, strategies, taxation or other achievement, results, Risks, trends or condition) and other events and circumstances planned, intended, anticipated, estimated or otherwise expected by the Company (collectively, “Expectations”), and our forward-looking statements (including all Risks) and other information reflect the Company’s current views about future events and circumstances. Although the Company believes those Expectations and views are reasonable, the results, actions, levels of activity, performance, achievements or condition of the Company or other events and circumstances may differ materially from our Expectations and views, and they cannot be assured or guaranteed by the Company, since they are subject to Risks and other assumptions, changes in circumstances and unpredictable events (many of which are beyond the Company’s control). In addition, new Risks arise from time to time, and it is impossible for the Company to predict these matters or how they may arise or affect the Company. Accordingly, the Corporation cannot assure you that its Expectations will be achieved in whole or in part, that it has identified all potential Risks, or that it can successfully avoid or mitigate such Risks in whole or in part, any of which could be significant and materially adverse to the Corporation and the value of your investment in the Corporation’s common stock.

These forward-looking statements reflect the Corporation’s Expectations, views, Risks and assumptions only as of the date of this Press Release, and the Corporation does not intend, assume any obligation, or promise to publicly update or revise any forward-looking statements (including any Risks or Expectations) or other information (in whole or in part), whether as a result of new information, new or worsening Risks or uncertainties, changed circumstances, future events, recognition, or otherwise.

Media Contact:	Investor Relations Contact:	Highwire Capital Contact:
Ronald Margulis	Sandy Martin	Ben Hudson
RAM Communications	Three Part Advisors	Highwire Capital, LLC
908-272-3930	214-616-2207	ben@highwire.capital
ron@rampr.com	smartin@threepa.com

FAQ

What is the per-share price offered in the SGRP Highwire merger?

The merger consideration is $2.50 per share in an all-cash transaction.

When did SGRP stockholders approve the Highwire merger?

SPAR Group stockholders approved the merger on October 25, 2024.

What is the new deadline for the SGRP-Highwire merger completion?

The lender commitment letter has been extended to January 15, 2025.

When was the SGRP-Highwire merger agreement initially announced?

The merger agreement was initially announced on August 30, 2024.

What is causing the delay in closing the SGRP-Highwire merger?

The merger closing is pending the completion of final lender requirements.