Mergers and acquisitions seem to be in the air this spring, and it looks like Hill International Inc. (NYSE: HIL) is the target of a takeover bid by a private equity firm. Hill received an offer to be acquired by DC Capital Partners. In the letter sent to Hill, the firm proposed an all cash acquisition valued at $5.50 per share, which is a premium of 40.7% from the previous closing price on May 1.
As noted in the letter, DC Capital said that it has been impressed with Hill’s recovery from the Libya liquidity predicament. However, the private equity firm remains concerned with the company’s disproportionate exposure to the Middle East region and equally concerning is its belief that Hill lacks sufficient fiscal discipline to maximize shareholder value. Ultimately the conclusion is that DC Capital does not believe that a public company venue is the best environment to address Hill’s challenges.
DC Capital is a private investment firm headquartered in the nation’s capital. The firm has experience investing in engineering, infrastructure and government related businesses. Also DC Capital owns a controlling interest in Michael Baker, an engineering, consulting and technical professional services and solutions provider with global reach. Michael Baker was formerly a publicly traded New York Stock Exchange listed company that was taken private in 2013. Considering this, DC Capital believes that it will have insight into the opportunities and risks associated with Hill.
Hill International provides program management, project management, construction management, construction claims and other consulting services primarily for the buildings, transportation, environmental, energy and industrial markets worldwide. It operates through two segments, Project Management and Construction Claims.
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Thomas Campbell, president of DC Capital, concluded his letter to Hill by saying:
We believe our proposal is both compelling and in the best interest of your shareholders, employees, and all constituents.
Monday afternoon, shares of Hill were up about 26% to $4.93, in a 52-week trading range of $2.83 to $7.00. The stock has a consensus analyst price target of $5.25.
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