B. Riley Financial Inc. on Feb. 25 completed the acquisition of National Holdings Corp. through a merger under Section 251(h) of the General Corporation Law of the State of Delaware.
In connection with the transaction, National Holdings becomes a wholly owned subsidiary of B. Riley Financial and an affiliate of B. Riley Wealth Management. National Holdings adds nearly 700 registered representatives and assets of approximately $20 billion to the B. Riley Financial platform. B. Riley Wealth Management currently includes more than 170 advisers and assets of over $12 billion, according to a news release.
The merger follows the completion of a cash tender offer by B. Riley Principal Merger Corp. III, a unit of B. Riley Financial, to purchase all the issued and outstanding National Holdings' common shares not currently owned by B. Riley Financial and its subsidiaries at $3.25 per share, net to the seller in cash, without interest, less any applicable withholding taxes.
The offer expired at midnight ET at the end of the day Feb. 24.
Computershare Trust Co. NA, the depositary for the offer, advised that the total number of shares tendered and not validly withdrawn as of the expiration of the offer was 5,364,675 for an aggregate purchase price of about $17.4 million. This represents about 39% of National Holdings' outstanding shares and a sufficient number of shares such that the minimum tender condition to the offer was satisfied.
The depositary also advised that an additional 60,060 shares had been tendered by notice of guaranteed delivery, representing less than 1% of National Holdings' shares.
B. Riley Principal Merger on Feb. 25 accepted for payment all shares validly tendered and not validly withdrawn pursuant to the offer. Shares validly tendered other than by notice of guaranteed delivery and not validly withdrawn will be paid for on the initial settlement date.
At the effective time of the merger, each outstanding share that is not owned by B. Riley Financial and its subsidiaries, National Holdings and its subsidiaries, or any National Holdings stockholders who properly demanded appraisal rights pursuant to Section 262 of the DGCL will be converted into the right to receive $3.25 per share in cash, without interest, less any applicable withholding taxes.
Following the completion of the merger, the shares will be delisted and will cease to trade on the Nasdaq Capital Market.
Upon completion of the merger, Bryant Riley and Daniel Shribman became members of National Holdings' board.
Robert Fagenson, Michael Singer, Barbara Creagh, Jeff Gary, Daniel Hume and Michael Mullen ceased serving as members of the company's board at the effective time of the merger. These departures were solely in connection with the merger and not a result of any disagreement with National Holdings, its management or its board.
B. Riley Securities Inc. was financial adviser on the merger. Sullivan & Cromwell LLP was legal counsel to B. Riley Financial, while Wilmer Cutler Pickering Hale and Dorr LLP acted as legal counsel to National Holdings. Skadden Arps Slate Meagher & Flom LLP was legal counsel and Keefe Bruyette & Woods was financial adviser to the special committee of National Holdings' board.