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DALLAS, June 10, 2010 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (Nasdaq:CSWC), a provider of long-term equity capital, has completed its transaction with NorthStar Memorial Group, LLC. NorthStar has acquired 100% of the outstanding common stock of Capital Southwest's wholly-owned portfolio company, Lifemark Group, for $84.7 million in cash.
Pursuant to terms of the Stock Purchase Agreement signed April 29, 2010, the $84.7 million purchase price will be reduced by the amount of Lifemark's outstanding indebtedness on the closing date, along with costs and expenses associated with the distribution of certain assets. Additionally, the purchase price is subject to customary adjustments based on the amount of Lifemark's net assets at the time the sale is completed. As a result, Capital Southwest estimates that $46.2 million of the proceeds will remain and be retained by the company for future investment and $24.4 million will be paid in long-term capital gains tax credit on behalf of its shareholders. Based on an individual tax rate of 15%, it is estimated individual shareholders will receive a net tax credit of $3.73 per share at 12/31/2010 from this transaction.
"Lifemark, a holding of ours for over 40 years, serves as an example of our ability to invest over the long haul enabling companies to grow through business cycles," stated Gary Martin, chairman and president of Capital Southwest. "The proceeds from this transaction will allow Capital Southwest to continue its focus on deploying capital in growth equity investments, as well as accelerating growth in our wholly owned portfolio companies through acquisitions."
Raymond James served as financial advisors to Lifemark and Locke Lord Bissell & Liddell served as Lifemark's legal counsel in this transaction.
Lifemark Group, based in Hayward, California, owns and operates cemeteries, funeral homes, mausoleums and mortuaries. Its operations, all of which are in California, include properties in San Mateo, Oakland, Hayward and Sacramento.