Chesapeake Utilities Corp. and Gatherco Inc. entered into a merger agreement, dated as of January 30, 2015 under which Chesapeake Utilities will acquire Gatherco.
Upon consummation of the transaction, Gatherco will merge into Aspire Energy of Ohio LLC, a unit of Chesapeake Utilities.
The Gatherco board of directors and Chesapeake Utilities’ merger and acquisition committee approved the transaction. The merger, which is expected to close in the second quarter of 2015, is subject to approval by the Gatherco shareholders.
Chesapeake Utilities stockholder approval of the merger is not required.
Management expects the transaction to be accretive in 2016 — the first full year of operation following the merger.
The transaction has an aggregate value of approximately $59.2 million, inclusive of the following:
· $49.8 million in exchange for all outstanding shares of Gatherco common stock, paid as follows:
· 593,005 shares of Chesapeake Utilities common stock, valued at $29.9 million, and
· $19.9 million in cash (before payment of certain transaction expenses and escrow deposits);
· $7.7 million in cash in consideration for cancellation of all outstanding Gatherco stock options; and
· Assumption of Gatherco's debt at closing, estimated to be $1.7 million.