SP Plus Stockholders Approve Merger With Metropolis Technologies

Rhea-AI Summary

SP Plus Corporation (SP) announced stockholder approval for the Agreement and Plan of Merger with Metropolis Technologies, Inc. Stockholders voted in favor of the Merger Agreement, with 99.94% approval. The Merger Agreement entails SP+ merging with Metropolis, with SP+ surviving as a wholly owned subsidiary. Stockholders will receive $54.00 per share in cash at the Merger's closing. The Merger is subject to certain closing conditions, including DOJ review under the HSR Act.

Insights

Financial Analyst

The approval of the merger between SP Plus Corporation and Metropolis Technologies represents a significant consolidation in the industry, which could have a substantial impact on the market dynamics. The overwhelming shareholder approval indicates a strong belief in the strategic rationale behind the merger. The agreed price of $54.00 per share will have immediate financial implications for shareholders, particularly in the form of liquidity and potential premium over the current trading price. Analyzing the past performance of SP+ and projecting the future financials post-merger will be crucial in understanding the value creation potential of this transaction.

Additionally, the pending approval under the HSR Act suggests that regulatory hurdles are still in place, which introduces an element of uncertainty. The market's reaction to this news could be mixed, as regulatory concerns might offset the positive sentiment around the shareholder vote. Investors should monitor the situation closely as the DOJ's decision will have a direct impact on the merger's timeline and, consequently, on the financial projections and stock performance of both companies.

Legal Expert

The 'Second Request' from the DOJ indicates a deeper level of scrutiny under antitrust laws, specifically the HSR Act. This is a critical juncture for the merger, as it suggests that there are potential competition concerns that the DOJ wants to investigate further. Compliance with this request is a mandatory step before the merger can proceed and it often involves the submission of extensive documentation and detailed information about the companies' operations and market impact.

The outcome of this antitrust review will have significant legal implications for the merger. If the DOJ finds that the merger could substantially lessen competition, it could impose conditions on the merger or, in extreme cases, seek to block it altogether. Companies undergoing a 'Second Request' may need to negotiate with the DOJ to address these concerns, which could involve divestitures or other remedies. The legal complexities of this process and the strategies employed by both companies' legal advisors will play a critical role in whether the merger is ultimately cleared by the authorities.

Market Research Analyst

The strategic implications of the merger for the broader market cannot be understated. SP Plus Corporation's integration into Metropolis Technologies could signal a shift in competitive dynamics, potentially altering the landscape for parking, transportation and related technology services. The merger could result in operational synergies, economies of scale and an enhanced service offering, potentially creating a more formidable competitor in the market.

It is essential to assess how this merger will affect customers, competitors and suppliers. A consolidation of this magnitude could lead to increased pricing power for the combined entity and may drive innovation through shared resources and technology. However, it could also raise barriers to entry for new players and potentially limit competition. Market research will be pivotal in forecasting the post-merger competitive environment and understanding how this consolidation will influence market trends, customer choices and competitive responses.

CHICAGO, Feb. 12, 2024 (GLOBE NEWSWIRE) -- SP Plus Corporation (“SP+”) (NASDAQ: SP) today announced that at its special meeting of stockholders held on February 9, 2024 (the “Special Meeting”), SP+ stockholders voted to approve the previously announced Agreement and Plan of Merger, dated as of October 4, 2023, by and among Metropolis Technologies, Inc. (“Metropolis”), Schwinger Merger Sub Inc., a direct, wholly owned subsidiary of Metropolis (“Merger Sub”) and SP+ (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into SP+ (the “Merger”), with SP+ surviving the Merger as a wholly owned subsidiary of Metropolis.

At the Special Meeting, approximately 99.94% of the votes cast were voted in favor of the proposal to adopt the Merger Agreement, which represented approximately 78.64% of the outstanding shares of SP+’s common stock entitled to vote thereon.

Under the terms of the Merger Agreement, SP+ stockholders will be entitled to receive $54.00 per share in cash, without interest and subject to any required tax withholding, at the closing of the Merger. Approval by SP+’s stockholders satisfies one of the conditions necessary for completion of the Merger. The Merger remains subject to the satisfaction or waiver of certain other closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). As previously disclosed, on February 5, 2024, SP+ and Metropolis each received a request for additional information and documentary material, often referred to as a “Second Request,” from the Antitrust Division of the Department of Justice (the “DOJ”), which extends the waiting period under the HSR Act until 30 days after SP+ and Metropolis have each substantially complied with the Second Request, unless the waiting period is extended voluntarily by the parties or is earlier terminated by the DOJ. SP+ and Metropolis will continue to cooperate fully with the DOJ in its review.

Full results of the votes on the proposals voted on at the Special Meeting will be set forth in a Form 8-K that SP+ will file with the U.S. Securities and Exchange Commission (the “SEC”). References herein to terms of the Merger Agreement are subject to, and are qualified by reference to, the full terms of the Merger Agreement, which SP+ filed with the SEC on Form 8-K on October 5, 2023.

Advisors

Morgan Stanley & Co LLC is serving as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to SP+.

Goldman Sachs & Co. LLC and BDT & MSD Partners, LLC are serving as financial advisors and Willkie Farr & Gallagher LLP and Fenwick & West LLP are serving as legal advisors to Metropolis.

About SP+

SP+ develops and integrates industry-leading technology with best-in-class operations management and support to deliver mobility solutions that enable the efficient and time-sensitive movement of people, vehicles, and personal travel belongings. With over 20,000 team members located throughout North America and Europe, SP+ is committed to providing solutions that make every moment matter for a world on the go.

Use of Forward-Looking Statements

This communication includes certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, the federal securities laws, including statements related to the proposed Merger, including financial estimates and statements as to the expected timing, completion and effects of the Merger. These forward-looking statements are based on SP+’s current expectations, estimates and projections regarding, among other things, the expected date of closing of the Merger and the potential benefits thereof, its business and industry, management’s beliefs and certain assumptions made by SP+, all of which are subject to change. Forward-looking statements often contain words such as “expect,” “anticipate,” “intend,” “aims,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “considered,” “potential,” “estimate,” “continue,” “likely,” “expect,” “target” or similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. By their nature, forward-looking statements address matters that involve risks and uncertainties because they relate to events and depend upon future circumstances that may or may not occur, such as the consummation of the Merger and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the completion of the Merger on anticipated terms and timing, including obtaining required stockholder and regulatory approvals, and the satisfaction of other conditions to the completion of the Merger; (ii) the ability of Metropolis to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Merger; (iii) potential litigation relating to the Merger that could be instituted against Metropolis, SP+ or their respective directors, managers or officers, including the effects of any outcomes related thereto; (iv) the risk that disruptions from the Merger will harm SP+’s business, including current plans and operations; (v) the ability of SP+ to retain and hire key personnel; (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger; (vii) continued availability of capital and financing and rating agency actions; (viii) legislative, regulatory and economic developments affecting SP+’s business; (ix) general economic and market developments and conditions; (x) potential business uncertainty, including changes to existing business relationships, during the pendency of the Merger that could affect SP+’s financial performance; (xi) certain restrictions during the pendency of the Merger that may impact SP+’s ability to pursue certain business opportunities or strategic transactions; (xii) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, pandemics, outbreaks of war or hostilities, as well as SP+’s response to any of the aforementioned factors; (xiii) significant transaction costs associated with the Merger; (xiv) the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger, including in circumstances requiring SP+ to pay a termination fee or other expenses; (xvi) competitive responses to the Merger; (xvii) the risks and uncertainties pertaining to SP+’s business, including those set forth in Part I, Item 1A of SP+’s most recent Annual Report on Form 10-K and Part II, Item 1A of SP+’s subsequent Quarterly Reports on Form 10-Q, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by SP+ with the SEC; and (xviii) the risks and uncertainties that are described in SP+’s definitive proxy statement dated and filed with SEC on January 10, 2024 (the “Proxy Statement”). These risks, as well as other risks associated with the Merger, are more fully discussed in the Proxy Statement. While the list of factors presented here is, and the list of factors presented in the Proxy Statement are, considered representative, no such list should be considered a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material impact on SP+’s financial condition, results of operations, credit rating or liquidity. These forward-looking statements speak only as of the date they are made, and SP+ does not undertake to and specifically disclaims any obligation to publicly release the results of any updates or revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Investor Contact

SP Plus Corporation, Investor Relations
200 E. Randolph Street, Suite 7700,
Chicago Illinois 60601-7702
investor_relations@spplus.com
(312) 274-2000

FAQ

What was the outcome of the stockholders' vote at the Special Meeting?

Approximately 99.94% of the votes cast were in favor of adopting the Merger Agreement, representing around 78.64% of SP+'s outstanding shares.

What is the cash amount per share that SP+ stockholders will receive at the Merger closing?

SP+ stockholders will be entitled to receive $54.00 per share in cash at the closing of the Merger.

What are the key conditions for the completion of the Merger?

The Merger is subject to certain closing conditions, including the expiration or termination of the waiting period under the HSR Act.

Who are the financial and legal advisors for SP+ in the Merger process?

Morgan Stanley & Co LLC is the financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is the legal advisor to SP+.

What is the role of Metropolis in the Merger Agreement with SP+?

Metropolis will merge with and into SP+, with SP+ surviving the Merger as a wholly owned subsidiary of Metropolis.