{"id":85618,"date":"2024-10-06T09:33:06","date_gmt":"2024-10-06T09:33:06","guid":{"rendered":"https:\/\/pakistaninewspaperlist.com\/news\/apollo-capital-notes-deficiencies-of-spar-group-take-private-by-highwire\/"},"modified":"2024-10-06T09:33:06","modified_gmt":"2024-10-06T09:33:06","slug":"apollo-capital-notes-deficiencies-of-spar-group-take-private-by-highwire","status":"publish","type":"post","link":"https:\/\/pakistaninewspaperlist.com\/news\/apollo-capital-notes-deficiencies-of-spar-group-take-private-by-highwire\/","title":{"rendered":"Apollo Capital Notes Deficiencies of SPAR Group Take-Private By Highwire"},"content":{"rendered":"
\n

Toronto, Canada, Oct. 04, 2024 (GLOBE NEWSWIRE) — Apollo Technology Capital Corp. (\u201cApollo Capital\u201d or \u201cwe\u201d), today expressed its concerns about the proposed take-private of SPAR Group, Inc. (NASDAQ: SGRP) (\u201cSPAR\u201d) by Highwire Capital (“Highwire”), a middle-market private equity firm focused on performing leveraged buy-outs, and discloses the intent of its Chairman and CEO, a stockholder of SPAR, to vote against the transaction at the upcoming special meeting of SPAR stockholders.\u00a0<\/p>\n

Apollo Capital contends that, among other things: (1) there are serious questions about the credibility and certainty of Highwire\u2019s financing and the ability to close the proposed take-private transaction, (2) if Highwire cannot obtain the financing, it would only be obligated to pay to SPAR a fee of $1.76 million, and Apollo Capital believes that such an amount would not begin to compensate SPAR and its stockholders for the harm they would suffer as a result of a failed transaction following a prolonged strategic review process, and (3) the transaction is conditioned on the balance sheet cash of SPAR being not less than $14,200,000, and SPAR has not provided disclosure as to its current expectation of balance sheet cash at closing. <\/p>\n

Following our review of the SEC disclosures by SPAR and Highwire, we question whether the proposed take-private transaction is nothing more than an option for Highwire to acquire SPAR at its sole discretion, and to the detriment of the SPAR stockholders.\u00a0 We believe that the SPAR Board of Directors (the \u201cSPAR Board\u201d) should immediately provide its stockholders with full and fair disclosure regarding the status and the terms of Highwire\u2019s proposed financing and SPAR\u2019s closing balance sheet cash expectations.\u00a0 Without this critical information, SPAR stockholders cannot reasonably be expected to have a fully informed vote on the proposed take-private transaction. \u00a0<\/p>\n

The Highwire Take-Private is Highly Conditional on Financing <\/em><\/strong><\/p>\n

Based on our review of the relevant SEC disclosures, the Highwire take-private transaction is subject to a very high level of uncertainty with respect to the ability of Highwire to finance the transaction.\u00a0 The merger agreement requires only that Highwire use \u201ccommercially reasonable efforts\u201d to obtain financing for the transaction.1<\/sup>\u00a0 Should those efforts prove to be unsuccessful, Highwire has no obligation to close and would suffer a penalty of merely $1.76 million.2<\/sup>\u00a0 <\/p>\n

Moreover, Highwire (a private equity firm whose financial resources are<\/p>\n

unknown) has made no representation regarding its own financial resources and has committed no amount of equity to the acquisition. In our belief, this is a negligible commitment to the transaction. This is particularly disappointing in light of the SPAR Proxy Statement disclosure that documentation governing Highwire\u2019s financing has not been finalized and, the actual terms of the financing may differ from those disclosed.3<\/sup><\/p>\n

Given the difficulty that SPAR would have in proving that Highwire had not used commercially reasonable efforts to obtain financing, the SPAR Board has effectively granted Highwire a free nine-month option to acquire SPAR. The highly conditional nature of the Highwire transaction is important information that was not disclosed in SPAR\u2019s September 3, 2024 press release announcing the transaction nor the SPAR Proxy Statement. <\/p>\n

More specially, on September 3, 2024, SPAR announced that it entered into a definitive agreement to be acquired by Highwire in an all-cash transaction funded entirely by debt financing to be obtained by Highwire.\u00a0 Days later, Highwire provided disclosure that it had secured a debt commitment letter from a financing source that included several crucial conditional terms which were omitted from the disclosure, one of which appears to be a \u201cdue diligence out\u201d for the financing source without any indication of specific diligence requests or the anticipated timeframe for completing such diligence.4<\/sup>\u00a0 <\/p>\n

More alarming is that while SPAR has set the meeting date for its stockholders to vote on the transaction and its Board unanimously recommends its stockholders vote \u201cfor\u201d the transaction, Highwire has yet to obtain the debt financing and SPAR has failed to provide its stockholders with meaningful disclosure on which to assess the credibility and certainty of the debt financing.5<\/sup> <\/p>\n

Our serious concerns about the credibility and certainty of Highwire\u2019s debt financing, in addition to the insufficient disclosure from SPAR and its Board, lead us to believe that the proposed Highwire take-private is not in the best interest of SPAR\u2019s public stockholders.\u00a0 Accordingly, Apollo Capital\u2019s Chairman and CEO intends to vote against the transaction and Apollo Capital urges the SPAR Board to immediately provide full and fair disclosure regarding the Highwire financing, the SPAR cash balance and reconsider its recommendation for the transaction.<\/p>\n

Contact:
<\/strong>contact@apollocapital.ca<\/u><\/a><\/p>\n\n

1<\/sup> See<\/em>, SPAR Group, Inc., Definitive Proxy Statement, filed with the SEC on October 2, 2024 (the “SPAR Proxy Statement”), at pp. 57, 79.<\/p>\n

2<\/sup> See<\/em> Proxy Statement, at pp. 7, 85.<\/p>\n

3<\/sup> See<\/em>, Proxy Statement, at p. 57.<\/p>\n

4<\/sup> See<\/em>, Highwire Capital, LLC, Schedule 13D, filed with the SEC on September 9, 2024 (the “Highwire 13D”), at Exhibit A of the Highwire 13D Exhibit 3.<\/p>\n\n

\n <\/div>\n","protected":false},"excerpt":{"rendered":"

Toronto, Canada, Oct. 04, 2024 (GLOBE NEWSWIRE) — Apollo Technology Capital Corp. (\u201cApollo Capital\u201d or \u201cwe\u201d), today expressed its concerns about the proposed take-private of SPAR Group, Inc. (NASDAQ: SGRP) (\u201cSPAR\u201d) by Highwire Capital (“Highwire”), a middle-market private equity firm focused on performing leveraged buy-outs, and discloses the intent of its Chairman and CEO, a […]<\/p>\n","protected":false},"author":2,"featured_media":85619,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/ml.globenewswire.com\/media\/NjlhNGYzYzQtMzI2MS00YzNlLThiNDMtMTAzOGYyOGIxNzc1LTUwMDEyODc0Nw==\/tiny\/Apollo-Technology-Capital-Corp.png","fifu_image_alt":"","footnotes":""},"categories":[208],"tags":[],"class_list":["post-85618","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-globenewswire"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/posts\/85618","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/comments?post=85618"}],"version-history":[{"count":0,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/posts\/85618\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/media\/85619"}],"wp:attachment":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/media?parent=85618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/categories?post=85618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/tags?post=85618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}