Robbins Arroyo LLP: Acquisition of Headwaters Incorporated (HW) by Boral Limited (BLD) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Headwaters Incorporated (NYSE: HW) by Boral Limited (ASX: BLD). On November 20, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Boral will acquire Headwaters. Under the terms of the agreement, Headwaters shareholders will receive $24.25 for each share of Headwaters common stock.
Is the Proposed Acquisition Best for Headwaters and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Headwaters is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $24.25 merger consideration represents a premium of only 20.70% based on Headwaters’ closing price on November 18, 2016. This premium is significantly below the average one day premium of nearly 34.33% for comparable transactions within the past three years.
On November 1, 2016, Headwaters reported strong earnings results for its fourth quarter and full year 2016. Headwaters reported revenue of $291.6 million for the three months ended September 30, 2016, a 7% increase from the same period of the prior year. Headwaters also reported revenue of $975 for the fiscal year ended September 30, 2016, a 9% increase from the prior year. In commenting on these results, Headwaters Chief Executive Officer and Chairman of the board Kirk A. Benson remarked, “We are pleased with our fiscal year performance, increasing Adjusted EBITDA by over 14%, and finishing well into our guidance range.… We anticipate a range of mid-single to double digit top-line growth in our legacy product groups, primarily through sales of increased volumes of fly ash and building products. Combined with our continuous improvement efficiency gains, our top-line growth should drive overall Adjusted EBITDA margin expansion in 2017.”
In light of these facts, Robbins Arroyo LLP is examining Headwaters’ board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Headwaters shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Headwaters shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.