PIA Merchandising Plans Merger With SPAR Group
PIA Merchandising Services Inc. said Monday that it has struck a deal with a New York competitor to form one of the largest marketing and retail merchandising support operations in the nation.
Irvine-based PIA, which performs tasks such as making sure clients’ products are properly displayed on store shelves, will merge with SPAR Group, a privately held collection of smaller companies that serves the same customer base.
Under the agreement, PIA will issue 12.3 million shares of stock to SPAR shareholders, giving SPAR a 69% stake in the combined company. Based on the price of PIA’s shares, which closed unchanged Monday at $3.88, the stock would be valued at nearly $48 million.
The new enterprise, SPAR Group Inc., would be headquartered in Tarrytown, N.Y. SPAR’s top executive, Robert G. Brown, would become chief executive and PIA chief executive Terry R. Peets would be vice chairman.
PIA’s Irvine office, which has 80 employees, is expected to remain open, said Cathy Wood, PIA’s chief financial officer.
The merger is just the latest example of ongoing consolidation within the merchandise service industry, which has grown over the past decade as more consumer product manufacturers opted to hire outside companies to see that their products are being properly handled.
The merger benefits both companies, Wood said. PIA will become part of a larger marketing services organization while dramatically improving its technological capabilities. SPAR, which started as a technology company, has a sophisticated Internet-based system in place that allows clients to monitor the merchandising of their products on a daily basis, she said.
At the same time, the merger gives SPAR a national presence and access to public markets.
Currently, SPAR has about 160 administrative employees in about seven offices, mostly on the East Coast, and about 3,000 workers in the field. PIA, in addition to its Irvine operation, has up to 3,000 field employees working out of about 16 offices across the nation.
The deal, which was unanimously approved Sunday by PIA’s seven-member board of directors, is expected to be completed by June. PIA shareholders must still approve the proposed combination.