Physicians Formula Holdings, Inc has entered into a definitive merger agreement that will see Markwins International Corporation acquire all of its outstanding shares of common stock for $4.90 per share or approximately $74.9m.
The merger agreement follows Physicians Formula’s announcement in August that it was to be acquired by Swander Pace Capital for $4.25 per share, or approximately $65m. However, the company has now terminated this agreement and is required to pay a termination fee of $1,285,000 to the affiliates of Swander Pace.
Ingrid Jackel, Physicians Formula chairwoman and ceo, said: “Our board of directors, following a thorough analysis by its special committee, has unanimously determined that the proposed merger with Markwins offers the best value for our stockholders. We are pleased that Markwins has agreed to purchase our company. Markwins and Physicians Formula sell non-competing brands in similar channels. Combining the resources and experience of both companies will strengthen the combined portfolio of brands.”
The proposed merger with Markwins, which is subject to various closing conditions, is expected to close later this year and provides an increase in the aggregate merger consideration to stockholders of approximately $10m, or a 15% increase on the Swander Pace offer.
Eric Chen, Markwins ceo, said: “The acquisition of Physicians Formula fulfills a strategic Markwins objective to expand and diversify our already robust brand portfolio. We believe this is a synergistic acquisition that creates an immediate opportunity to broaden our consumer base and enrich our retail partnerships.”