FirstCity Financial Corporation (NASDAQ: FCFC, “FirstCity” or “the Company”) and Värde Partners, Inc. (“Värde”) announced today that they have entered into a definitive merger agreement under which certain funds managed by Värde will acquire FirstCity. Under the terms of the merger agreement, FirstCity stockholders will receive $10.00 per share in cash for each share of FirstCity stock they own. The transaction is valued at $224.9 million, including debt.
The $10.00 per share consideration represents a 20.5% premium to the closing price of FirstCity’s shares on December 20, 2012, and a 22.8% premium to the 30-day average closing price of $8.14. The transaction is expected to close in the first half of 2013.
FirstCity’s Board of Directors, based on the recommendation of a Strategic Review Committee comprised entirely of independent directors, reviewed and unanimously approved the transaction and has resolved to recommend that FirstCity’s stockholders approve and adopt the merger agreement. In addition, each member of FirstCity’s Board of Directors and senior management team has entered a support agreement through which they have agreed, among other things, to vote their shares, representing 16.6% of the total outstanding shares of the Company, in favor of the approval and adoption of the merger agreement.
Värde and certain of its affiliates have worked with FirstCity since 1993 and have co-invested in a substantial majority of FirstCity’s U.S. distressed asset acquisitions since 2009. Over the past several years, Värde and FirstCity have jointly invested over $800 million to purchase distressed assets with an unpaid principal balance of over $1.4 billion.“This transaction delivers compelling and immediate cash value for our stockholders, and reflects an important next step in FirstCity’s development,” said James T. Sartain, President and Chief Executive Officer of FirstCity. “FirstCity and Värde have worked together successfully for nearly 20 years, and we are confident that with the continued support of our dedicated employees we will build on that history together in the years to come.”