MOD-PAC Corp.'s Board of Directors Approves Offer to Acquire All of the Company's Outstanding Shares of Common Stock and Class B Stock for $8.40 per Share in CashBUFFALO, N.Y., April 11, 2013 (GLOBE NEWSWIRE) -- MOD-PAC CORP. (Nasdaq:MPAC) (the "Company") announced that it has entered into a definitive merger agreement under which Kevin T. Keane, Chairman of the Company, and Daniel G. Keane, President and Chief Executive Officer of the Company, and their affiliates and associates (the "Buyer Group") will acquire the Company through Rosalia Capital LLC, an entity they control that was formed for the purposes of the acquisition.
Under the agreement, the Company's shareholders, excluding the Buyer Group, will receive $8.40 per share for each share of the Company's Common Stock and Class B Stock, in cash, upon completion of the transaction. The price represents a premium of 53% to the closing price of the Company's shares on October 26, 2012, the last full trading day before the announcement by the Buyer Group of its proposal to acquire all of the outstanding stock of the Company, and a premium of 83% to the volume-weighted average trading price for the 30 trading days ended October 26, 2012. Also, the price represents a premium of 16.7% to the price originally proposed by the Buyer Group on October 26, 2012, when the Buyer Group announced its acquisition proposal.
The Buyer Group are the beneficial owners of approximately 18.7% in the aggregate of the Company's outstanding Common Stock and approximately 51.9% in the aggregate of the Company's outstanding Class B Common Stock, which together represent approximately 41.0% of the voting power in the aggregate of the Company's stock.
A special committee of the Board of Directors, comprised of all of the independent directors of the Company, was formed in October 2012 to review the proposal from the Buyer Group, with the assistance of independent legal and financial advisors. The special committee completed a thorough review of the proposal, considered alternatives, and unanimously concluded that the transaction with the Buyer Group was in the best interests of the Company's shareholders other than the Buyer Group. Based on the unanimous recommendation of the special committee, the agreement was also approved by the Board of Directors.
Completion of the transaction is subject to certain closing conditions, including receipt of shareholder approval and other customary conditions. The merger agreement contains a non-waivable condition that a majority of the votes cast at the shareholder meeting to approve the merger and to adopt the merger agreement, other than those shares owned by the Buyer Group, have been voted in favor of such actions. In addition, M&T Bank has entered into a binding commitment letter to provide debt financing in the event the closing conditions have been met.
Western Reserve Partners LLC and Harter Secrest & Emery LLP are acting as financial advisor and legal advisor, respectively, to the special committee.
Daroth Capital Advisors LLC and Schulte Roth & Zabel LLP are acting as financial advisor and legal advisor, respectively, to Daniel G. Keane and Rosalia Capital LLC.
Hodgson Russ LLP is acting as legal advisor to the Company.
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