Direct General Buyout

Direct General Corporation (DRCT)
$628mm Buyout

Buyout of nonstandard auto insurer by Calera and TPG

$21.25 per DRCT share; $628.2mm total
DRCTnews - stock chart

Announced 12.05.06

Developments

Litigation settled 3.02.07
Litigation settled 3.06.07

Closed 3.08.07

Buyout group:

Calera Capital Formerly known as Fremont Partners
TPG Capital Formerly known as the Texas Pacific Group

Financial

DRCT: SunTrust
Elara: Bear Stearns

Legal

DRCT: Baker Donelson
Special Committee: Dorsey & Whitney
Elara: Skadden / Cleary Gottlieb

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I The Merger

1.1 The Merger
1.2 Effective Time; Closing
1.3 Effect of the Merger
1.4 Charter; Bylaws
1.5 Directors and Officers

Article II Conversion and Exchange of Securities

2.1 Effect of Merger on Capital Stock
2.2 Surrender of Certificates
2.3 Further Action

Article III Company Reps

3.1 Organization; Standing and Power; Governing
Documents; Subsidiaries
3.2 Capital Structure
3.3 Authority; No Conflict; Necessary Consents
3.4 Sec Filings; Financial Statements; Internal Controls
3.5 Absence of Certain Changes or Events
3.6 Taxes
3.7 Real Properties
3.8 Intellectual Property
3.9 Company Insurance
3.10 Litigation
3.11 Compliance with Law
3.12 Environmental Matters
3.13 Brokers' and Finders' Fees
3.14 Transactions with Affiliates
3.15 Employee Benefit Plans and Compensation
3.16 Contracts
3.17 Information in the Proxy Statement
3.18 Fairness Opinion
3.19 Takeover Statutes
3.20 Board Approval
3.21 Insurance Matters
3.22 Restrictions on Business Activities
3.23 Books and Records

Article IV Parent Reps

4.1 Organization; Capitalization
4.2 Authority; No Conflict; Necessary Consents
4.3 Financing
4.4 Information in Proxy Statement
4.5 Interim Operations of Merger Sub

Article V Conduct Prior to the Effective Time

5.1 Conduct of Business by the Company
5.2 Assistance with Financing

Article VI Additional Agreements

6.1 Proxy Statement
6.2 Meeting of Company Shareholders; Board
Recommendation
6.3 Acquisition Proposals
6.4 Confidentiality; Access to Information; No Modification
of Representations, Warranties or Covenants
6.5 Public Disclosure
6.6 Regulatory Filings; Reasonable Best Efforts
6.7 Notification of Certain Matters
6.8 Third-party Consents
6.9 Employee Matters
6.11 Company Options
6.12 Section 16 Matters

Article VII Conditions to the Merger

7.1 Each Party
7.2 Parent and Merger Sub
7.3 Company

Article VIII Termination, Amendment and Waiver

8.1 Termination
8.2 Notice of Termination; Effect of Termination
8.3 Fees and Expenses
8.4 Amendment
8.5 Extension; Waiver

Article IX General Provisions

9.1 Non-survival of Representations and Warranties
9.2 Notices
9.3 Interpretation; Knowledge
9.4 Counterparts
9.5 Entire Agreement; Third-party Beneficiaries
9.6 Severability
9.7 Other Remedies
9.8 Governing Law
9.9 Rules of Construction
9.10 Assignment
9.11 Waiver of Jury Trial

Proxy Solicitation

Shareholders approve at March 8 meeting

Press release 3.08.07
84.9% of outstanding vote FOR

Proxy statements

Definitive 2.05.07
Preliminary 1.04.07

Summaries

Proxy statement summary

Agreements

Limited guarantee - Sponsors 12.04.06
Credit facility amendment 12.07.06

Employment

Disclosures

Proxy statement summary

Agreements

Resignation agreement 12.04.06
Resignation agreement 12.04.06
Employment agreement 12.04.06
Employment agreement 12.04.06
Director indemnification agreement 12.04.06
Special committee indemnification agreement 12.04.06

Deal Protection

No shop covenant

Merger agreement §6.3
Proxy statement disclosure

Break-up fee

$13mm, plus out-of-pocket expenses
Agreement §8.3
Proxy statement disclosure

Regulatory Approvals

HSR Act

Merger agreement §6.6
Proxy statement disclosure

Fairness Opinion

SunTrust Robinson Humphrey fairness opinion

Disclosure

Proxy statement disclosure

Related Topics

Clear Gif