Pre-Paid Legal Announces Merger Agreement
January 31 2011 - 8:31AM
PR Newswire (Canada)
ADA, Okla., Jan. 31, 2011 /CNW/ -- 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. Randy Harp of Pre-Paid Legal Services, Inc.,
+1-580-436-1234; or Chris Tofalli of MidOcean Partners,
+1-914-834-4334 Web Site: http://www.prepaidlegal.com
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