CHICAGO (March 3, 2008) — McDermott Will & Emery represented Follett Corporation, a privately held company, in the negotiation and execution of a merger agreement with Varsity Group Inc. (NASDAQ: VSTY), an outsource solution provider to education institutions nationwide. Pursuant to the merger agreement, Follett will acquire all outstanding shares of Varsity Group for $0.20 per share in cash. Follett is the nation's largest provider of library materials and library technology to K-12 schools, the leading operator of college bookstores and a major distributor of textbooks to institutions at all levels of education.
The McDermott team representing Follett was led by Brooks Gruemmer and also included Samuel W. Wales, John P. Hammond and Kimberly West, with assistance from Jeffrey C. Wagner and Stephen R. Miller.
The acquisition will be conducted by means of a tender offer for all of the issued and outstanding shares of Varsity, followed by a merger of Varsity with Follett's acquisition subsidiary. The tender offer to acquire all issued and outstanding shares of Varsity Group is expected to commence in the next two weeks. The offer is subject to a number of closing conditions and is presently expected to close in the second quarter of 2008. The Board of Directors of Varsity Group has unanimously approved the transaction and has recommended that Varsity Group stockholders accept the offer and tender their shares of Varsity Group pursuant to the offer.
Additionally, an affiliate of Follett purchased Bank of America's interest in Varsity Group's line of credit. In connection with this funding arrangement, Varsity Group has granted a warrant to an affiliate of Follett to acquire shares of Varsity Group common stock equal to the total advances made under the line of credit divided by the exercise price of $0.20 per share, subject to adjustment.
McDermott's M&A Practice Group represents a wide spectrum of publicly and privately held businesses from Global 50 companies to venture backed start-ups, as well as private equity funds and investment banks. As a globally integrated team, our lawyers manage complex transactions with components in multiple jurisdictions throughout the world.