Featherlite to merge with Universal Trailer Holdings subsidiary

Featherlite, Inc. announced that it has signed a definitive agreement to merge with a subsidiary of Universal Trailer Holdings Corp. of Cincinnati, Ohio, a corporation with majority ownership by Dubin Clark & Company, a private equity investment firm.

Under the terms of the agreement, a subsidiary of Universal Trailer will merge with and into Featherlite, Featherlite will become a wholly-owned subsidiary of Universal Trailer, and Featherlite shareholders will receive $6.50 in cash for each outstanding share of Featherlite common stock. This price represents a 52.9% premium over the closing price of Featherlite stock on July 26. The aggregate consideration to be paid to Featherlite shareholders and option and warrant holders is approximately $79.5 million, and Universal Trailer will assume approximately $29.1 million in debt obligations.

A special committee of Featherlite's outside directors has approved the merger. The merger is expected to be completed by October 31 and is subject to various conditions, including shareholder approval, the expiration of the applicable waiting period under the Hart-Scott-Rodino Act, the closing of debt financing arrangements, the effectiveness of the agreement between Universal Trailer and Featherlite Coaches, Inc. referred to below, and other customary closing conditions. A special meeting of Featherlite shareholders will be announced following preparation and filing of proxy materials with the Securities and Exchange Commission.

In addition, Featherlite Coaches, Inc., a newly-formed company controlled by Conrad Clement, Featherlite's Chairman, President and CEO, Tracy Clement, Featherlite's Executive Vice President, and Bulk Resources, Inc., has entered into a definitive agreement with Universal Trailer to purchase the assets and assume substantially all of the liabilities of Featherlite's motorcoach division immediately following the closing of the merger with Featherlite. Featherlite is not a party to this agreement and does not own any equity of Featherlite Coaches. The closing of the merger between Featherlite and Universal Trailer is subject to the agreement between Featherlite Coaches and Universal Trailer remaining in full force and effect.

"We are very pleased to announce that Featherlite will be teaming with Universal Trailer to form the nation's premiere trailer company," Featherlite President and CEO Conrad Clement said. "We have been exploring alternatives to enhance shareholder value and build the strategic strength of the Company since January of this year. We believe this merger offers an excellent value for our shareholders and great new opportunities for Featherlite employees and dealers.

"The Featherlite brand stands for the highest quality and innovation in aluminum specialty trailers. We are honored to have played a role since 1988 in building a loyal customer base and the most extensive dealer network in the industry. Now the Company is ready to begin a new era as part of the Universal Trailer team. The joining of these two firms anticipates a bold future of product innovation and ever-expanding services to its customers," Clement commented.

Tom Frey, CEO of Universal Trailer, stated, "Universal Trailer has become the largest specialty trailer company through building a family of brands offering great value across a broad range of price points. We're excited about the addition of the excellent Featherlite brand to that family."

Universal Trailer expects to retain the Featherlite trailer manufacturing locations and dealer network.

TAGS: Trailers
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