updated 9/7/2010 7:16:01 AM ET 2010-09-07T11:16:01

LOUISVILLE, Ky., Sept. 7, 2010 (GLOBE NEWSWIRE) -- ResCare, Inc. (Nasdaq:RSCR) announced today that it has entered into a definitive agreement with an entity sponsored by Onex Partners III, L.P. ("Onex"), an affiliate of Onex Corporation. Under the terms of the agreement, Onex would acquire all of the outstanding shares of ResCare common stock not owned by Onex affiliates or participating members of ResCare's management for $13.25 per share in cash, which represents a 30.7% premium to the closing price on August 13, 2010, the last trading day before Onex made its initial proposal. Affiliates of Onex currently own common and preferred stock representing approximately 24.9% of the Company's outstanding common stock, assuming conversion of the preferred stock.

The agreement permits ResCare to solicit superior proposals from third parties during a 40-day "go shop" period ending October 16, 2010, 61 days after the public announcement of the initial proposal by Onex. The Special Committee of independent directors of ResCare, with the assistance of its independent advisors, intends to solicit superior proposals during this period.  If a superior proposal solicited during this period leads to the execution of a definitive agreement for an alternative transaction, ResCare would be obligated to pay a break-up fee to Onex equal to 2% of the equity value of the Onex transaction on a fully diluted basis. ResCare advises that there can be no assurance that the solicitation of superior proposals will result in an alternative transaction.  

The definitive agreement provides that Onex will conduct a tender offer to purchase shares of ResCare common stock. The tender offer is subject to a non-waivable condition that a majority of the public, non-Onex shares be tendered. There is no financing condition to consummate the transaction. The transaction is also subject to the satisfaction of other customary closing conditions.

Ronald G. Geary, Chairman of the Board and the Special Committee, said, "After a thorough and extensive evaluation process, the Special Committee and our Board have endorsed this transaction with Onex as being in the best interests of our company, its shareholders and the people who depend on our services. The tender offer by Onex requires that a majority of the public shares be tendered, which gives individual shareholders the opportunity to make their own evaluation of the transaction."

The tender offer is scheduled to commence on September 22, 2010, and to expire at midnight on October 20, 2010, unless extended in accordance with the terms of the definitive agreement and applicable law. Following the consummation of the tender offer, Onex would acquire any remaining public shares for $13.25 per share in cash through a statutory share exchange.

Officers of the Company, who together currently own in the aggregate approximately 1% of its outstanding shares, have agreed to exchange their shares for equity interests in the sponsored purchasing entity in lieu of receiving cash consideration for their shares. These shares are not included in the public, non-Onex shares.  The officer agreements will terminate if the definitive agreements terminate.

The Special Committee has retained Goldman, Sachs & Co. as its financial advisor and Frost Brown Todd LLC as its legal counsel.

About ResCare

ResCare, with more than 35 years of experience helping people reach their highest level of independence, is one of the largest providers of home care to the elderly and persons with disabilities. It also offers residential and support services to people with intellectual and developmental disabilities and provides education, vocational training and job placement for people of all ages and skill levels. Based in Louisville, Kentucky, ResCare and its nearly 50,000 dedicated employees serve more than a million people a year in 41 states, Washington, D.C., Puerto Rico and a number of international locations. For more information about ResCare, please visit the Company's website at www.rescare.com .

Important Information

This announcement and the description contained herein are for informational purposes only and are not an offer to purchase or a solicitation of an offer to sell securities of the Company. The tender offer described herein has not yet been commenced. At the time the tender offer is commenced, the Company intends to file a tender offer statement on a Schedule TO containing an offer to purchase, a letter of transmittal and other related documents with the Securities and Exchange Commission (the "SEC"). At the time the tender offer is commenced, the Company intends to file with the SEC a solicitation/recommendation statement on Schedule 14D-9 and, if required, will file a proxy statement or information statement with the SEC at a later date. Such documents will be mailed to shareholders of record and will also be made available for distribution to beneficial owners of common stock of the Company. The solicitation of offers to buy common stock of the Company will only be made pursuant to the offer to purchase, the letter of transmittal and related documents. Shareholders are advised to read the offer to purchase and the letter of transmittal, the solicitation/recommendation statement, the proxy statement, the information statement and all related documents, if and when such documents are filed and become available, as they will contain important information about the tender offer and proposed share exchange. Shareholders can obtain these documents when they are filed and become available free of charge from the SEC's website at www.sec.gov , or from the information agent that Onex selects. In addition, copies of the solicitation/recommendation statement, the proxy statement and other filings containing information about the Company, the tender offer and the share exchange may be obtained, if and when available, without charge, by directing a request to Res-Care, Inc. Attention: David Miles, Chief Financial Officer at 502-394-2137, or on the Company's corporate website at www.rescare.com .

From time to time, ResCare makes forward-looking statements in its public disclosures, including statements relating to expected financial results, revenues that might be expected from new or acquired programs and facilities, its development and acquisition activities, reimbursement under federal and state programs, financing plans, compliance with debt covenants and other risk factors, and various trends favoring privatization of government programs. In ResCare's filings under the federal securities laws, including its annual, periodic and current reports, the Company identifies important factors that could cause its actual results to differ materially from those anticipated in forward-looking statements. Please refer to the discussion of those factors in the Company's filed reports.

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