Edgewater to Spend $130 Million to Buy Back Shares
by February 5, 2001 12:00 am 48 views
Edgewater Technology Inc. will spend $130 million to buy back about 16.25 million shares of its stock for $8 per share, the company announced on Jan. 29.
Owners of 93 percent of Edgewater’s outstanding common shares (26.6 million shares) jumped at the chance to sell because the company’s stock has been trading in the $5 to $7 range since May.
But some of those shareholders failed to follow through with the requirements of the tender offer or decided to withdraw their shares, bringing the final count being tendered to 24.4 million (85 percent of Edgewater’s shares).
Since Edgewater has set aside $130 million for the buyback, the shares will be purchased on a pro rata basis of 66.65 percent, meaning if a shareholder wants to sell all his shares of Edgewater, the company will only buy back 66.65 percent of the shareholder’s holdings.
The buyback accounts for 56.6 percent of Edgewater’s outstanding common shares. The offer to buy back shares was originally announced in December and expired Jan. 22.
Payment for the accepted shares, and return of all other tendered shares, was scheduled to be made Jan. 30.
As of Jan. 23, Edgewater had 28.7 million shares of common stock issued and outstanding. As a result of the offer, Edgewater Technology will have 12.4 million shares of common stock issued and outstanding after making payment for the accepted shares.
Formerly known as StaffMark Inc., Edgewater Technology Inc. is the Fayetteville holding company of Edgewater Technology, an e-solutions business based in Wakefield, Mass. The corporation is in the process of moving its headquarters to Wakefield.
Clete Brewer of Fayetteville, CEO of Edgewater Technology Inc., couldn’t be reached for comment.
Many shareholders have expressed anger over Edgewater selling off its staffing divisions last year and reinventing itself as a technology company by focusing on its Edgewater Technology division in Massachusetts, the site of a Dec. 26 shooting in which seven Edgewater employees were killed.