Recently, Cerberus Capital Management (CCM) made headlines when the company announced a partnership with Darwin Deason, who is both the founder of Affiliated Computer Services, Inc. (ACS) and the company's chairman, to jointly purchase all outstanding shares of ACS common stock. According to reports, the total value of the proposed transaction will top eight billion dollars, which means the cash purchase price of each share will be $59.25. The purchase will be funded by a letter of credit from CitiCorp Global Markets in order to finalize the transaction.
Deason, who plans to continue to serve as the Executive Chairman after the deal is completed, made assurances that the Affiliated Computer Services would continue to operate according to the current practices and policies of ACS and will endeavor to maintain the cultivation of its highly valued employee base. According to a Cerberus spokesman, the pool of talented and experienced employees of ACS is “one of its most important assets."
In addition, both Deason and Cerberus state that ACS will continue to provide the valuable management knowledge and high quality asset management services that ACS customers have come to expect.
The partnership between Mr. Deason and Cerberus Capital Management has set out with the intention of immediately opening negotiations with ACS and the partners are hopeful that they can bring this deal to a quick completion. While Deason is acting as the chairman of Affiliate Computer Services and is the company's founder, the partnership still plans on conducting the normal process of due diligence.
The question also naturally arises of any type of conflict of interest in the structure of the deal. However, neither CCM nor Mr. Deason anticipate that there will be any impediments to completion of the transaction or any regulatory approvals that might get in the way of a timely and smooth closing of the deal.
CCM and Deason have agreed to jointly submit their proposal to the Board of Directors of ACS and negotiate with a specially selected committee of independent company directors. The investment partnership is confident that their complete proposal and the process of negotiation and due diligence will result in an agreement that is in the best interest of all parties involved, including the public shareholders of ACS. They also expect that their proposal will be subject to typical market scrutiny and discussion but are confident of the overall plan they are proposing.
Cerberus Capital Management was established in 1992 and has subsequently become one of the leading private asset management services companies in the world. They are responsible for providing investment management services for a total of over $25 billion in capital through their various asset management funds and accounts. Cerberus provides valuable management knowledge and services which has been instrumental in helping to transform many of its portfolio companies into long-term, successful industry leaders.
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