Revco Holders Approve $1.25 Billion Leveraged Buyout
TWINSBURG, Ohio (AP) _ Revco D.S. Inc. said its stockholders on Tuesday approved a $1.25 billion leveraged buyout by a management-led group that will take the big drugstore chain private.
Revco said 19.6 million shares, or 76 percent of the shares represented at the special meeting held for the vote, were voted in favor of the transaction.
The acquisition, in which the group is paying $38.50 for each of Revco’s 32.5 million shares outstanding, is expected to be completed by year’s end.
The investor group includes about 35 members of Revco’s management, including Sidney Dworkin, chairman and chief executive, and William B. Edwards, president and chief operating officer.
Revco operates more than 2,000 stores in 30 states. Last week the company reported net income of $17.1 million on sales of $1.28 billion for the six months ended Nov. 15.
The group initially proposed in March to acquire Revco for cash and securities valued at $36 a share. But five months later the group sweetened the bid to $38.50 a share in cash, and the revised proposal was accepted by a committee of Revco’s outside directors.
In a leveraged buyout, the purchase is made with mostly borrowed funds that are repaid with money raised from the target company’s cash flow or asset sales.