Walmart to acquire Vizio for $11.50 per share in cash

Walmart (WMT) and Vizio (VZIO) announced they have entered into an agreement for Walmart to acquire Vizio for $11.50 per share in cash, equating to a fully diluted equity value of approximately $2.3B. The transaction is subject to regulatory clearance and other closing conditions specified in the merger agreement. Vizio’s board of directors has unanimously approved the transaction. VIZIO stockholders holding approximately 89% of the voting power of VIZIO’s outstanding common shares have approved the transaction. No other stockholder approval is required to complete the transaction. VIZIO has the right to terminate the transaction within a 45-day period if, subject to the terms and conditions of the merger agreement, VIZIO receives and accepts a “Superior Offer” as defined in the merger agreement. Upon completion of the transaction, VIZIO’s Class A common stock will no longer be publicly listed. Due to certain transaction-related costs associated with the acquisition, including for talent retention and technology integration, Walmart expects the transaction to be slightly dilutive to EPS in the near term. To finance the acquisition, Walmart plans to use cash and/or debt. The transaction is not subject to a financing condition. IRR for this transaction is expected to be ahead of Walmart’s reported ROI. Following the completion of the transaction, VIZIO’s business will be reported as part of the Walmart U.S. segment.