SPAR Group Receives Amended and Restated Commitment Letter for Highwire Merger

Rhea-AI Summary

SPAR Group (NASDAQ: SGRP) has announced receiving an Amended and Restated Commitment Letter for the financing required under its merger agreement with Highwire Capital. The key modification extends the Commitment Termination Date to February 15, 2025, while all other terms and conditions remain unchanged.

The merger agreement, originally dated August 30, 2024, involves SPAR Group being acquired by Highwire Capital in an all-cash transaction. The company's stockholders have already approved the transaction during a special meeting held on October 25, 2024.

Positive

• Secured extension of financing commitment for merger completion
• Stockholder approval already obtained for the transaction
• All-cash transaction structure provides clear value proposition

Negative

• Extended timeline suggests potential delays in merger completion
• Uncertainty around financing terms despite commitment letter extension

Insights

M&A Specialist

The extension of the financing commitment letter to February 15, 2025 for the Highwire merger signals continued progress in the $150 million all-cash acquisition of SPAR Group. This development maintains deal momentum following shareholder approval in October 2024, though the extended timeline suggests some complexity in finalizing the financing arrangements. The unchanged terms and conditions indicate the fundamental deal structure remains solid.

Merger financing extensions are relatively common in the current market environment, particularly given tighter credit conditions and heightened due diligence requirements from lenders. For SPAR Group's market cap of $43.8 million, securing stable financing commitments is important for deal certainty. The extension provides additional time to address any remaining conditions while maintaining the agreed-upon transaction framework.

The reaffirmation of the commitment letter, albeit with an extended timeline, helps mitigate deal completion risk. However, investors should note that while this development is procedurally important, the key value driver remains the ultimate deal closing rather than intermediate financing milestones.

AUBURN HILLS, Mich.--(BUSINESS WIRE)-- 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, announced today that it received an Amended and Restated Commitment Letter for the financing required under the merger agreement with Highwire Capital extending the Commitment Termination Date to February 15, 2025. All other terms and conditions set forth in the Commitment Letter remain unchanged.

As previously announced, SPAR Group entered into the Agreement and Plan of Merger, dated as of 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.

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 annual stockholder meeting, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250115581334/en/

Media Contact:

Ronald Margulis

RAM Communications

908-272-3930

ron@rampr.com

Investor Relations Contact:

Sandy Martin

Three Part Advisors

214-616-2207

smartin@threepa.com

Highwire Capital Contact:

Ben Hudson

Highwire Capital, LLC

ben@highwire.capital

Source: SPAR Group, Inc.

FAQ

What is the new Commitment Termination Date for SGRP's merger with Highwire Capital?

The Commitment Termination Date has been extended to February 15, 2025, as per the Amended and Restated Commitment Letter.

When did SGRP stockholders approve the Highwire Capital merger?

SPAR Group stockholders approved the merger transaction during a special meeting held on October 25, 2024.

When was the original merger agreement between SGRP and Highwire Capital signed?

The original Agreement and Plan of Merger was signed on August 30, 2024.

What type of transaction structure is proposed for the SGRP-Highwire merger?

The merger is structured as an all-cash transaction where Highwire Capital will acquire SPAR Group.

Have any terms changed in SGRP's merger financing commitment besides the termination date?

No, all other terms and conditions set forth in the Commitment Letter remain unchanged.