ISC Moving Closer To Going Private

The International Speedway Corp. is getting closer to going private. (HHP/Tom Copeland Photo)
NASCAR has closed its merger with the International Speedway Corp. (HHP/Tom Copeland Photo)

DAYTONA BEACH, Fla. — International Speedway Corp. issued a preliminary proxy statement in regard to taking the public company private.

They are asking the shareholders to vote on and approve an agreement and plan of merger with NASCAR Holdings, Inc.  This is an important step of the “going-private” transaction.

In November 2018, Jim France presented the Board of Directors a proposal, where-as the France Family Group would acquire the company by purchasing shares they did not already own.

The transaction value was $1.280 billion based on an acquisition price of $45 per share with approximately 28.475 million shares outstanding.

A Special Committee of Directors was formed to review, evaluate and negotiate on behalf of the shareholders with respect to the offer. Legal and financial advisors were retained to assist in the evaluation and due diligence process.

The initial offer to acquire was at $42 per share.  The Special Committee initially responded with a counter-offer of $54 per share. Over the next several months, meetings and presentations were held.  Negotiations went back and forth and both parties adjusted their expectations. In April 2019, they agreed that $45 per share would be in the best interest of shareholders and to pursue toward a definitive merger agreement.

During the early part of the season, the bankruptcy filing of DC Solar had a material impact on the industry. According to filings, NASCAR, International Speedway Corp. and its tracks were owed about $4 million. In addition, Chip Ganassi Racing was on the hold for $4.3 million and shut down its NASCAR Xfinity Series team as a result.

A class action lawsuit contesting the merger was brought by the Fireman’s Retirement System of St. Louis. They alleged that the initial proposal was too low and unfair to minority shareholders. It also noted conflicts of interest and lack of independence between the France Family, NASCAR and ISC.

After the offer price was raised several times, they eventually met with representatives and determined not to challenge the fairness of the transaction price.

Other interesting deal highlights included: NASCAR will purchase the shares of Brian France and potential deal termination fees of $117 million to NASCAR and $78 million to International Speedway Corp.

Financing for the deal was provided by Goldman Sachs, Bank of America and PNC Bank. The credit facility will total $1.650 billion consisting a term loan and revolver.

In late May 2019, the Special Committed determined that the $45 per share offer was fair and reasonable and in the best interest of the company and shareholders. Each shareholder will receive cash for their shares owned.

Several factors were cited in their recommendation, including the ongoing business pressures facing the business and industry, decreasing attendance, uncertainty over the broadcast contract negotiations, sanction agreement renewals and expiration of the motorsports tax provision.

The International Speedway Corp. Board of Directors approved and executed the merger agreement.  The next step was to issue a proxy statement and submit the transaction for approval by the shareholders of the company.

The transaction is expected to close by the end of 2019 and is subject to the usual customary closing conditions.