ADA, Okla., Jan. 31, 2011 /PRNewswire/ -- Pre-Paid Legal
Services, Inc. (NYSE: PPD, "Pre-Paid" or the "Company") announced
that it entered into a definitive merger agreement on January 30, 2011, with MidOcean PPL Holdings
Corp. and PPL Acquisition Corp., both newly created entities formed
by MidOcean Partners, a leading New
York based private equity firm ("MidOcean"). The merger
agreement provides that MidOcean will acquire all of the
outstanding shares of Pre-Paid for a cash payment of $66.50 per share, or approximately $650 million in the aggregate.
Pre-Paid entered into the merger agreement based on the
unanimous recommendation by a Special Committee comprised of
independent directors of Pre-Paid's Board of Directors and the
unanimous consent of its full Board of Directors.
"We are excited to have MidOcean involved in our efforts to
increase the awareness of our consumer and small business services.
Our entire team is excited about the future prospects of our
company and continues to believe, as does MidOcean, that our
products offer tremendous value," said Harland C. Stonecipher, Founder and Chairman of
Pre-Paid Legal Services, Inc.
"We were drawn to Pre-Paid because of the Company's strong and
unique value proposition to its members, associates and provider
network. We look forward to combining our strong operating
resources with Pre-Paid's strong management team to drive growth
and create long-term value," said Frank
Schiff, a Managing Director at MidOcean Partners.
The closing of the transaction is subject to certain terms and
conditions customary for transactions of this type, including
receipt of stockholder and regulatory approvals. The parties
currently anticipate consummating the transaction on or before
July 31, 2011. The equity financing
necessary for the transaction will be provided by funds affiliated
with MidOcean Partners and the debt financing necessary for the
transaction will be provided by Macquarie Capital, subject to
customary closing conditions. Upon completion of the transaction,
Pre-Paid will become a privately held company and its common stock
will no longer be traded on the NYSE.
The Special Committee was advised by an independent financial
advisor, Berenson & Company, and an independent legal advisor,
Mayer Brown LLP. Macquarie Capital acted as financial advisor to
MidOcean Partners and Kirkland & Ellis LLP acted as legal
advisor.
About Pre-Paid Legal Services, Inc. - We believe our products
are one of a kind, life events legal service plans. Our plans
provide for legal service benefits provided through a network of
independent law firms across the U.S. and Canada, and include unlimited attorney
consultation, will preparation, traffic violation defense,
automobile-related criminal charges defense, letter writing,
document preparation and review and a general trial defense
benefit. We have an identity theft restoration product we think is
also one of a kind due to the combination of our identity theft
restoration partner and our provider law firms. More information
about our products and us can be found at our homepage at
www.prepaidlegal.com.
About MidOcean Partners - MidOcean Partners is a premier private
equity firm focused on the middle market. MidOcean is committed to
investing in high quality companies with stable market positions
and multiple opportunities for growth in the United States and Europe. Targeted sectors include consumer and
leisure, business and financial services, media and communications
and industrials. MidOcean utilizes a broad foundation of expertise
in its focus industries and its transatlantic platform to create
value for its investors and partners. For more information, visit
www.midoceanpartners.com.
Forward-Looking Statements
Statements in this press release, other than purely historical
information, regarding our future plans and objectives and expected
operating results, dividends and share repurchases and statements
of the assumptions underlying such statements, constitute
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. The forward-looking statements
contained herein are based on certain assumptions that may not be
correct. They are subject to risks and uncertainties incident to
our business that could cause actual results to differ materially
from those described in the forward-looking statements. These risks
and uncertainties are described in the reports and statements filed
by us with the Securities and Exchange Commission, including (among
others) those listed in our Form 10-K, Form 10-Q and Form 8-K, and
include the risks that our membership persistency or renewal rates
may decline, that we may not be able to continue to grow our
memberships and earnings, that we are dependent on the continued
active participation of our founder and Chairman, that pending or
future litigation may have a material adverse effect on us if
resolved unfavorably to us, that we may have compromises of our
information security, that during an economic downturn in the
economy consumer purchases of discretionary items may be affected
which could materially harm our sales, retention rates,
profitability and financial condition, that we could be adversely
affected by regulatory developments, that competition could
adversely affect us, that we are substantially dependent on our
marketing force, that our stock price may be affected by short
sellers, that we have been unable to increase our employee group
membership sales, that our active premium in force is not
indicative of future revenue as a result of changes in active
memberships from cancellations and additional membership sales,
that we have repurchased more than half our outstanding shares over
the past years and that completion of this transaction is subject
to conditions in the financing commitments that could impact the
ability to obtain long-term financing, the possibility of the
occurrence of an event that could constitute a Company Material
Adverse Effect as defined in the merger agreement and other risks
and uncertainties set forth in the Company's filings with the
Securities and Exchange Commission. Please refer to pages 16 - 19
of our 2009 Form 10-K and pages 7 and 8 of our September 30, 2010 Form 10-Q for a more complete
description of these risks. There can be no assurance that any
transaction between Pre-Paid Legal Services, Inc. and MidOcean will
occur, or will occur on the timetable contemplated hereby. These
risks and uncertainties could cause actual results to differ
materially from any forward-looking statements made herein.
We undertake no duty to update any of the forward-looking
statements in this release.
Additional Information and Where to Find It:
Pre-Paid Legal Services, Inc. will file with the Securities and
Exchange Commission a current report on Form 8-K, which will
include the merger agreement and related documents. The proxy
statement that Pre-Paid Legal Services, Inc. plans to file with the
Securities and Exchange Commission and mail to its stockholders
will contain information about Pre-Paid Legal Services, Inc., the
proposed merger and related matters. STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT CAREFULLY WHEN IT IS AVAILABLE, AS IT WILL
CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER
BEFORE MAKING A DECISION ABOUT THE MERGER. In addition to receiving
the proxy statement from Pre-Paid Legal Services, Inc. by mail,
stockholders will be able to obtain the proxy statement, as well as
other filings containing information about Pre-Paid Legal Services,
Inc., without charge, from the Securities and Exchange Commission's
website (http://www.sec.gov) or, without charge, from Pre-Paid
Legal Services, Inc. at
http://www.prepaidlegal.com/newCorp2/investor/investor_home.html.
This announcement is neither a solicitation of proxy, an offer to
purchase nor a solicitation of an offer to sell shares of Pre-Paid
Legal Services, Inc.
SOURCE Pre-Paid Legal Services, Inc.