China Fire & Security Group today announced that it has entered into a definitive merger agreement with Amber Parent Limited, an affiliate of funds managed by Bain Capital Partners, LLC, and Amber Mergerco, Inc., a wholly-owned subsidiary of Parent. Under the terms of the merger agreement, each share of the Company's common stock issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive $9.00 in cash ... The offer represents a total consideration of approximately $265.5 million (taking into account the contribution to be made by the Rollover Investors), a 44% premium over the Company's closing price on March 4, 2011 and a 38% premium over the Company's 90-trading day volume weighted average price calculated as of May 19, 2011.
China Fire & Security Group announced today that the Special Committee of its Board of Directors has received a non-binding letter from a leading global private equity firm, pursuant to which the PE proposes to acquire all of the outstanding shares of common stock of China Fire in cash at a price which represents a premium over the current stock price. According to the Proposal, the PE is willing to structure the proposed acquisition to allow the existing members of the Company's management to exchange all or part of their equity interests in the Company into equity securities in the post-acquisition company. The Proposal is subject to certain conditions, including, among other things, successful completion of due diligence to the satisfaction of the PE.
Despite the solid fundamentals underlying our fire protection industry and some modest signs of improvement in the iron and steel industry, a recovery has been much slower than we had expected. For the immediate future, we believe our core customers will continue to reactively preserve cash and defer spending, and as such, we view it prudent that we withdraw our business outlook at this time. Having said that, while we await the eventual recovery in the iron & steel vertical, we are committed to expand our competitive advantages and sustain our position as the leading total solution provider of industrial fire protection systems in China.