Star Equity to Acquire Harte Hanks for $38.4M in Cash and Preferred Stock
STRR has more than doubled off its 52-week low of $1.95 on elevated volume (1.8× avg).
Summary
Star Equity Holdings agreed to acquire Harte Hanks for $5.00 per share in cash and preferred stock, a $38.4 million deal that creates a scaled BPO platform with $384 million in pro forma revenue.
Key Events · M&A and Partnerships · STRR
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Definitive Merger Agreement Signed
A definitive agreement has been reached to acquire Harte Hanks for $5.00 per share, valuing Harte Hanks at approximately $38.4 million based on 7.68 million fully diluted shares.
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Consideration Mix and Financing
Harte Hanks stockholders may elect cash or 0.50 shares of Star's 10% Series A Preferred Stock per share, with aggregate cash capped at $19.2 million. The cash portion will be funded with cash on hand and a drawdown on Harte Hanks' $25 million credit facility with Texas Capital Bank, capped at $15 million.
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Pro Forma Financial Impact
The combined company would have FY2025 pro forma revenue of approximately $384 million and adjusted EBITDA of approximately $30 million, including $10 million in estimated annualized cost synergies from eliminating duplicative public-company and back-office costs.
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Closing Conditions and Timeline
The merger requires Harte Hanks stockholder approval, effectiveness of a Form S-4 registration statement, and other customary conditions. A 30-day go-shop period allows Harte Hanks to solicit alternative proposals. Closing is expected in Q4 2026.
Analysis · STRR · Trade & Services
A definitive merger agreement has been signed to acquire Harte Hanks for $5.00 per share, valuing the target at approximately $38.4 million. Stockholders of Harte Hanks can elect cash or Star's 10% Series A Preferred Stock, with cash capped at $19.2 million. The deal is expected to close in Q4 2026, subject to Harte Hanks stockholder approval and other conditions. The merger creates a diversified BPO platform with pro forma FY2025 revenue of $384 million and adjusted EBITDA of $30 million, including $10 million in cost synergies. The cash portion will be funded with cash on hand and a drawdown on Harte Hanks' existing credit facility. The transaction is accretive and does not issue Star common stock, preserving its $215 million NOL position.
At the time of this filing, STRR was trading at $9.80 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $36.2M. The 52-week trading range was $1.95 to $11.99. This filing was assessed with positive market sentiment and an importance score of 9 out of 10.