Pike Corp. would go private through merger

Staff Report

August 4, 2014

After nearly 10 years as a public company, plans were announced Monday for Pike Corp. — one of Mount Airy’s oldest businesses — to return to the “private environment” through a merger.

Officials of Pike Corp., formerly known as Pike Electric, have signed a definitive merger agreement under which an investment firm, Court Square Capital Partners, would acquire the company in partnership with J. Eric Pike, chairman and chief executive officer of Pike Corp.

Through this transaction, each of the company’s shareholders would receive $12 in cash, without interest and less any applicable withholding taxes, for every share of Pike’s common stock which they hold, according to the announcement.

That price represents a premium of about 50.8 percent over the stock’s closing price on Friday.

Pike Corp., one of the nation’s largest specialty construction and engineering firms serving the electric power industry, was founded in 1945 by local resident Floyd S. Pike with a small crew and a salvaged truck.

After 59 years as a private company, Pike went public in 2005 and its common stock is listed on the New York Stock Exchange.

Pike Corp. has attempted to broaden its geographic reach and diversity capabilities in recent years with the acquisitions of several other companies, including operations in the western U.S. Its services now include facilities planning and siting, permitting, engineering, design, installation, maintenance and repair of electric and communications infrastructure.

“I believe this transaction will open an exciting new chapter for the company, our employees and customers,” Eric Pike said in a statement regarding the merger agreement. “We can deliver immediate value to shareholders, while we continue the integration of our acquired companies and our national service line expansion,” he added.

“The company has made solid progress executing our diversified service strategy, but I recognize that it will still take more time, investment and patience. For these reasons, I believe our efforts will be better supported by partnering with Court Square and operating in a private environment,” Pike further said in the statement.

He will continue to lead the company as chairman and chief executive officer and will maintain a significant equity investment in the firm by contributing most of his equity in the corporation to the new company in connection with the transaction.

In addition, Pike Corp. will continue to be headquartered in Mount Airy. The company that is said to be the largest publicly traded firm in Surry County has hundreds of local employees and is listed with 5,700 nationwide.

“I am committed to this journey and plan to make a significant investment in this transaction with Court Square, an experienced and well-respected investor with an outstanding reputation,” Pike continued.

The company’s board of directors adopted the merger agreement, acting on the unanimous recommendation of a special committee comprised entirely of independent and disinterested directors. The board resolved to submit it to the Pike Corp, shareholders for their approval.

Company officials expect the transaction to be completed in the second quarter of Pike’s 2015 fiscal year, or the fourth quarter of calendar year 2014, subject to approval from its shareholders and regulatory approvals, and satisfaction of other customary closing conditions.”

“The special committee and its advisers conducted a disciplined and independent process intended to ensure the best outcome for shareholders,” stated James L. Turner, chairman of the committee and lead independent director of the board of directors.

The merger agreement provides for a 30-day “go-shop” period, during which the special committee — with the assistance of its independent financial adviser BofA Merrill Lynch — will actively solicit, and to the extent received, evaluate and potentially enter into negotiations with parties that offer alternative proposals to acquire Pike Corp.