Edgewater to Buy Back 16 Million Shares

Edgewater Technology Inc. said on Monday that the final tally for its tender offer was 24.4 million shares, which means that owners of 85 percent of the company’s outstanding common shares want to sell them back for $8 per share. The stock has been trading in the $5-$7 range since May.

But not all those shares will be repurchased.

Edgewater has set aside $130 million to buy back 16.25 million of those shares on a pro rata basis of 66.65 percent. If a shareholder wants to sell all of his Edgewater stock to the company, Edgewater will only repurchase 66.65 percent of the shareholder’s holdings.

Initially, owners of a total of 93 percent of Edgewater’s shares (26.6 million shares) filed for the tender offer. 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.

The buyback accounts for 56.60 percent of Edgewater’s outstanding common shares. The offer to buy back shares was announced in December and expired Jan. 22.

Payment for the accepted shares, and return of all other tendered shares, was scheduled to be made today.

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 in Wakefield, Mass. The corporation is moving its headquarters to Wakefield.

By the end of the day Monday, when the announcement was made, Edgewater’s stock had dropped 25 percent ($1.75 per share) to $5.19 per share. The stock was trading at $5.25 per share after the final tally was made public Monday.

Shares of Edgewater (Nasdaq: EDGW) were trading at $5.19 this morning after closing at $5.25 Monday.

Clete Brewer of Fayetteville, CEO of Edgewater Technology Inc., couldn’t be reached for comment.

Many shareholders have expressed anger over Edgewater’s 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.

Credit Suisse First Boston and Banc of America Securities served as co-dealer managers for the tender offer. EquiServe is the depository.