Standard Parking Corp. announced Wednesday that it had signed a definitive agreement to acquire Nashville-based Central Parking Corp. for $350 million, a transaction that would double the size of the Chicago-based company.
Combined, the company would operate 4,400 parking facilities and 2.2 million parking spaces in hundreds of cities, including Chicago.
Under terms of the transaction, Standard will pay Central Parking’s shareholders $27 million in cash as well as issue 6.16 million shares of stock, valued at roughly $111 million, and assume $210 million of the company’s debt. Central Parking stockholders will get three seats on an expanded Standard board.
Central Parking, which operates more than 2,200 parking facilities nationally, is owned by affiliates of Kohlberg & Co., Lubert-Adler Partners L.P. and Versa Capital Management, LLC.
The boards of both companies have approved the transaction, as have Central Parking’s shareholders. It still needs the approval of Standard Parking’s shareholders as well as regulatory and antitrust clearance.
After the merger, expected to close in the third quarter, the two companies will continue to operate independently under both names while the brands’ strength is evaluated. “Until the deal closes, we will continue to knock each other’s brains out in terms of competition for clients and for customers and within the industry,” James Wilhelm, Standard Parking’s president and CEO, told financial analysts on an investor call Wednesday morning.
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James Marcum, Central Parking’s current chief executive, will become chief operating officer of the combined entity that will be based in Chicago but maintain an office in Nashville. The merger is expected to be accretive to earnings in two to three years, the company said.
Wilhelm said the combined company will generate cost savings of at least $20 million within two years, partly through reducing the number of employees by less than 2 percent. The two companies together now employ more than 25,000 people.
Technology will be a keen focus of the combined company, as it tries to build customer loyalty by offering web and phone-based transactions, executives told analysts. “The future of technology like Facebook and Twitter and Groupon, to be about to reach a customer base that we will grow across the platform that we will have built, 2.2 million parking spaces, is the vision,” Wilhelm said.
Executives said there is little geographic overlap between the two. According to the company’s web site, Central Parking operates about 100 parking facilities in the Chicago area. Standard Parking’s Chicago operations include parking facilities at O’Hare and Midway airports, U.S. Cellular Field and McCormick Place.
Since Standard Parking went public in 2004, it has acquired nine companies
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