The Jordan Company L.P. to Acquire Reinhold Industries, Inc.
02 November 2006 - 11:52PM
PR Newswire (US)
SANTA FE SPRINGS, Calif., Nov. 2 /PRNewswire-FirstCall/ -- Reinhold
Industries, Inc. (NASDAQ:RNHDA) of Santa Fe Springs, California,
today announced that it and an affiliate of The Jordan Company,
L.P., a leading private equity investor, have signed a definitive
merger agreement pursuant to which The Jordan Company will acquire
Reinhold through a tender offer for all outstanding shares of
common stock of the Company for $12.50 per share. Ralph R. Whitney,
Jr., Chairman of the Board of Reinhold, commented, "We are pleased
to enter into this agreement, which is the culmination of a
thorough review of the strategic alternatives available to
Reinhold. In addition to these sale proceeds, since 2004 Reinhold
has paid $20.75 in dividends per share from internal cash flow and
divestiture proceeds." Michael T. Furry, President and Chief
Executive Officer of Reinhold, commented, "The Reinhold team is
excited by the opportunity to partner with The Jordan Company and
build on Reinhold's market position as a leading supplier of
specialty niche composites." Jonathan F. Boucher, Managing
Principal of Jordan, commented, "We look forward to working with
the Reinhold management team to build a premier supplier to the
commercial and military aerospace industry. We plan to grow the
business internally and through strategic acquisitions." Pursuant
to the terms of the merger agreement, Reinhold Acquisition Corp.,
an affiliate of The Jordan Company, L.P., will commence a tender
offer within five business days to acquire all outstanding shares
of Reinhold common stock at a price of $12.50 per share in cash or
an aggregate value of approximately $41.3 million. Following
receipt of at least 51% of Reinhold's outstanding shares in the
tender offer, all remaining shares will convert into the right to
receive $12.50 per share in cash through a merger. In addition to
the tender of at least 51% of the outstanding shares, the closing
of the transaction is subject to certain other conditions set forth
in the Merger Agreement. The Board of Directors of Reinhold
Industries unanimously approved the terms of the tender offer and
merger and recommends that the shareholders of Reinhold accept the
offer. The Board of Directors has received an opinion from its
financial advisor, TM Capital Corp., that the consideration to be
paid to the shareholders in the transaction is fair from a
financial point of view to such shareholders. Simultaneously with
the Company's execution of the merger agreement, ten of the
Company's shareholders, representing approximately 49% of
Reinhold's outstanding shares, entered into a Shareholders
Agreement with Reinhold Acquisition Corp. pursuant to which these
shareholders agree to tender their shares of the Company's common
stock in the tender offer. Michael T. Furry, the Company's
President, Chief Executive Officer and a member of the Board of
Directors, Brett R. Meinsen, the Company's Chief Financial Officer,
and Ralph R. Whitney, Jr., Andrew McNally IV and Glenn Scolnik,
each a member of the Board of Directors, were among the
shareholders executing the Shareholders Agreement. Pursuant to the
merger agreement with Jordan, Reinhold may not participate in
discussions regarding any competing offer to acquire its stock or
assets, except under certain circumstances, in order to comply with
its fiduciary duties. Under certain circumstances described in the
merger agreement, Reinhold would be obligated to pay a break up fee
to The Jordan Company of 3% of the enterprise value of Reinhold
plus reimbursement of expenses up to $1.0 million if Reinhold or
Jordan terminates the transaction. Reinhold intends to file a
Schedule 14D-9 Recommendation Statement with the Securities and
Exchange Commission relating to the transaction with a copy of the
merger agreement as an exhibit. Reinhold Industries, Inc. is a
manufacturer of advanced custom composite components and sheet
molding compounds for a variety of applications in the United
States and Europe. The Jordan Company, L.P. is a New York-based
investment firm with approximately $2.5 billion of capital under
management that has been sponsoring and investing in middle market
leveraged buyout transactions for more than 20 years. Jordan
currently has a portfolio of investments in over 15 businesses
representing more than $4.0 billion in annual revenue. The
acquisition of Reinhold will be funded by capital provided by The
Resolute Fund, L.P., a $1.5 billion private equity fund managed by
Jordan. TM Capital Corp., financial advisor to the Board of
Directors of Reinhold, is a New York and Atlanta based merchant
bank which advises clients on a broad range of global merger,
acquisition and financing transactions. Availability of Additional
Information This announcement is neither an offer to purchase nor a
solicitation of an offer to sell shares of the Company. The tender
offer for the outstanding shares of the Company's common stock
described in this announcement has not commenced. At the time the
offer is commenced, Reinhold Acquisition Corp. will file tender
offer materials with the U.S. Securities and Exchange Commission,
and the Company will file a Solicitation/Recommendation Statement
with respect to the offer. The tender offer materials (including an
Offer to Purchase, a related Letter of Transmittal and certain
other offer documents) and the Solicitation/Recommendation
Statement will contain important information, which should be read
carefully before any decision is made with respect to the tender
offer. The Offer to Purchase, the related Letter of Transmittal and
certain other offer documents, as well as the
Solicitation/Recommendation Statement will be made available to all
Company shareholders at no expense to them. In addition, the tender
offer materials and Solicitation/Recommendation Statement will be
made available for free at the U.S. Securities and Exchange
Commission's website at http://www.sec.gov/. In addition to the
Solicitation/Recommendation Statement, the Company files annual,
quarterly and special reports, proxy statements and other
information with the U.S. Securities and Exchange Commission. You
may read and copy any reports, statements or other information
filed by the Company as the U.S. Securities and Exchange Commission
public reference room at 100 F Street, N.E., Washington, D.C.
20549. Please call the U.S. Securities and Exchange Commission at
1-800-SEC-0330 for further information on the public reference
room. The Company's filings with the U.S. Securities and Exchange
Commission are also available to the public from commercial
document-retrieval services and at the U.S. Securities and Exchange
Commission's website at http://www.sec.gov/. SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS To the extent the Company makes certain
"forward-looking statements" in this press release, such as
statements about future plans, goals and other events which have
not yet occurred, such statements are intended to qualify for the
safe harbors from liability provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements can
generally be identified because they include words such as the
Company "believes," "anticipates," "expects" or words of similar
import. These forward-looking statements involve risks and
uncertainties and the actual results could differ materially from
those discussed in the forward-looking statements. These risks and
uncertainties include, without limitation, risks associated with
levels of U.S. and foreign military spending, currency fluctuations
and the financial condition of the airline industry. You should
consider these risks and factors and the impact they may have when
you evaluate these forward-looking statements. These statements are
based only on the Company's knowledge and expectations on the date
of this press release. The Company disclaims any duty to update
these statements or other information in this press release based
on future events or circumstances. DATASOURCE: Reinhold Industries,
Inc. CONTACT: Wanda Morrison of Reinhold Industries, Inc.,
+1-562-944-3281 Web site: http://www.reinhold-ind.com/
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