Target Hospitality Disbands Buyout Review Committee

Dow Jones09-25

By Dean Seal

Target Hospitality has disbanded a board committee formed to evaluate an unsolicited buyout bid from a TDR Capital affiliate and indicated that an acquisition may be off the table.

The Woodlands, Texas-based modular housing company said Wednesday that the affiliate, Arrow Holdings, didn't reaffirm its offer or advance an alternative proposal after Target Hospitality said in June that the federal government would terminate a major contract with the company.

No other formal competing offers were put forward after the contract termination was disclosed, Target Hospitality said.

"The company cannot predict what Arrow, TDR or others will do in the future regarding a potential acquisition of the company," Target Hospitality said.

Shares fell 21% to $7.50 in premarket trading.

Target Hospitality said on June 27 that it had formed the committee to review Arrow's March offer to acquire all shares that it didn't already own for $10.80 apiece.

Earlier in June, the company received notice that the U.S. government planned to terminate its South Texas Family Residential Center contract within 60 days. The contract was based on a fixed minimum lease revenue commitment and contributed about $55.9 million in revenue in 2023.

Chief Executive Brad Archer on Wednesday reaffirmed the company's guidance of $375 million to $385 million in revenue this fiscal year and said the conclusion of the TDR offer review gave Target Hospitality flexibility to pursue other capital allocation opportunities.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

September 25, 2024 07:36 ET (11:36 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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