Exhibit 99.1
FOR IMMEDIATE RELEASE
COMPUDYNE CORPORATION AGREES TO BE ACQUIRED BY
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INVESTOR GROUP FOR $7.00 PER SHARE IN CASH
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ANNAPOLIS, MD, August 7, 2007 -- CompuDyne Corporation (NASDAQ: CDCY), an
industry leader in sophisticated security products, integration and technology
for the public security markets, announced that it has signed a definitive
purchase agreement to be acquired by an investor group consisting of affiliates
of The Gores Group, LLC and industry executive Xxxxxx Xxxxxxxxxx. Clearlake
Capital Group, L.P. has committed to provide debt and equity financing to the
investor group in the transaction.
CompuDyne's Board of Directors has agreed to recommend the sale of the company
via a cash tender offer at $7.00 per share followed by a merger at the same
price. An agreement and plan of merger was executed on August 6, 2007. CompuDyne
expects the cash tender offer to be made to all shareholders during the month of
August. The offer price of $7.00 per share represents a 32% premium to the
closing price of CompuDyne common stock as of August 6, 2007.
"This action represents the culmination of a long process of exploring the best
direction for CompuDyne to take" said Xxxxxx Xxxxxxx, Chairman & CEO of
CompuDyne, "Given our relatively small size, complex structure, and the
inordinate costs of being a public company in the post-Sarbanes Oxley era, a
sale of the entire company to an organization that has the financial and
managerial resources to continue to build CompuDyne without the managerial
diversion and financial drain of public company requirements seemed the most
appropriate step to take. The $7.00 per share price, which represents a
significant premium over recent public market prices for our stock, was
determined to represent fair value."
Xxxxxx Xxxxxxxxxx, an industry executive with significant experience in the
defense and government services industry, will become CEO of CompuDyne upon
closing. "Based upon my experience in the industry, CompuDyne represents a
unique opportunity to create a substantial player in the public security
marketplace." Xxxxxxxxxx said. "We believe that as a private company CompuDyne
will be better able to fully realize its potential in this important market."
Xxxxxxxxxx most recently was Corporate Vice President, Business Development, and
President & CEO of L-3 Satellite Networks at L-3 Communications. Prior thereto,
Xx. Xxxxxxxxxx held senior positions at GE Capital Spacenet Services, General
Dynamics, SAIC, and Unisys.
Based in Los Angeles, CA, The Gores Group, LLC is a private investment firm
focused on buyout transactions across several industry sectors. "CompuDyne is
well positioned in a broad range of public security markets which offer
substantial growth opportunity over the foreseeable future," said Xxx X.
Xxxxxxxxxx, Managing Director at Gores. "We are pleased to be working with
Xxxxxx and the team at CompuDyne, as well as CompuDyne's customers and vendors,
to create additional value in the business."
Xxxxxx Xxxxx, partner and co-founder at Clearlake Capital, said "CompuDyne has a
strong franchise and is uniquely positioned in key areas within the homeland
security and infrastructure protection markets. We are excited to partner with
Xxxxx and Xxxxxx to invest behind the Company's efforts to expand its solutions
offering to serve the global customer base."
USBX Advisory Services LLC acted as financial advisor to CompuDyne and rendered
a fairness opinion.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP acted as legal advisor to CompuDyne.
Xxxxxxxx, Xxxxxxxx, Xxxxxx & Co., Inc. acted as financial advisor to the
investor group. Xxxxxxx XxXxxxxxx LLP, Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
and Xxxxxx & Bird LLP acted as legal advisors to the investor group.
About CompuDyne
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CompuDyne Corporation is a leading provider of products and services to the
public security market with 2006 revenues of $147.5 million. CompuDyne operates
in four distinct segments in this marketplace: Institutional Security Systems,
Attack Protection, Integrated Electronics and Public Safety and Justice.
CompuDyne's customers include several divisions of federal, state and local
governmental agencies and corporate clientele. For more information, please
visit xxx.XxxxxXxxx.xxx
About The Gores Group
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Founded in 1987, The Gores Group, LLC is a private equity firm focused on
acquiring controlling interests in mature and growing businesses which can
benefit from the firm's operating experience and flexible capital base. The firm
combines the operational expertise and detailed due diligence capabilities of a
strategic buyer with the seasoned M&A team of a traditional financial buyer. The
Gores Group, LLC has become a leading investor having demonstrated over time a
reliable track record of creating substantial value in its portfolio companies
alongside management. The firm's current private equity fund has committed
equity capital of $1.3 billion. Headquartered in Los Angeles, California, The
Gores Group, LLC maintains offices in Boulder, Colorado and London. For more
information, please visit xxx.xxxxx.xxx.
About Clearlake Capital Group
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Clearlake Capital Group is a private investment firm integrating private equity,
leveraged finance, and special situations in both private and public market
opportunities. Clearlake seeks to partner with world-class management teams to
invest in businesses going through change or expansion with patient long-term
capital. The firm has a flexible mandate to invest across the capital structure
in corporate divestitures, recapitalizations, restructurings, going private
buyouts and growth capital investments. Xxxxxxxxx's founding principals have led
over 30 investments totaling more than $3 billion of capital in sectors
including business services, communications and media, energy and power,
healthcare, manufacturing, retail/consumer and technology.
For more information, please contact:
CompuDyne Corporation:
Xxxxxxxx X. Xxxxxxxxxx
Investor Relations
(000) 000-0000 xxx.000
xxxxxxxxx.xxxxxxxxx@xxxxxxxxx.xxx
The Gores Group, LLC:
Xxxxx Xxxxxxxx
(000) 000-0000
Xxxx Xxxxxxx and Xxxxxx Xxxxxxx
Xxxxxxx and Company
(000) 000-0000
For Clearlake Capital Group:
Xxxxxxx Xxxxxxx
Xxxx Xxxxxxxxxxx P.R., Inc.
(000)-000-0000
For Xxxxxx Xxxxxxxxxx:
Xxxxxxx Xxxxx
Xxxxxxxxxx Communications
(000)- 000-0000
Investors Contact:
Xxx Xxxxxx
XxxXxxxxx Partners, Inc.
(000) 000-0000
Forward-Looking Statements
Certain statements made in this press release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, including those statements concerning CompuDyne's expectations with
respect to future operating results and other events. Although CompuDyne
believes it has a reasonable basis for these forward-looking statements, these
statements involve risks and uncertainties that cannot be predicted or
quantified and consequently, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors which could
cause actual results to differ from expectations include, among others, the
occurrence of any event, change or other circumstances that could give rise to
the termination of the merger agreement with the investor group, the risk that
the conditions relating to the required minimum tender of CompuDyne shares or
any required regulatory clearance might not be satisfied in a timely manner or
at all, the failure to satisfy other conditions to completion of the merger,
risks that the proposed transaction disrupts current plans and operations and
the potential difficulties in key employee retention as a result of the
transaction, capital spending patterns of the security market and the demand for
CompuDyne's products, competitive factors and pricing pressures, changes in
legislation, regulatory requirements, government budget problems, CompuDyne's
ability to secure new contracts, the ability to successfully grow CompuDyne by
completing acquisitions, the ability to remain in compliance with its bank
covenants, delays in government procurement processes, ability to obtain bid,
payment and performance bonds on various of CompuDyne's projects, technological
change or difficulties, the ability to refinance debt when it becomes due,
product development risks, commercialization difficulties, adverse results in
litigation, the level of product returns, the amount of remedial work needed to
be performed, costs of compliance with Xxxxxxxx-Xxxxx requirements and the
impact of the failure to comply with such requirements, risks associated with
internal control weaknesses identified in complying with Section 404 of
Xxxxxxxx-Xxxxx, CompuDyne's ability to simplify its structure and modify its
strategic objectives, and general economic conditions. Risks inherent in
CompuDyne's business and with respect to future uncertainties are further
described in its other filings with the Securities Exchange Commission, such as
CompuDyne's Form 10-K, Form 10-Q, and Form 8-K reports.
IMPORTANT ADDITIONAL INFORMATION:
The tender offer described in this announcement has not yet been commenced. This
announcement and the description contained herein is neither an offer to
purchase nor a solicitation of an offer to sell shares of CompuDyne. At the time
the tender offer is commenced, Gores Patriot Holdings, Inc., an affiliate of The
Gores Group, LLC, and Patriot Acquisition Corp., a wholly-owned subsidiary of
Gores Patriot Holdings, Inc., intend to file a Tender Offer Statement on
Schedule TO containing an offer to purchase, forms of letters of transmittal and
other documents relating to the tender offer, and CompuDyne Corporation intends
to file a Solicitation/Recommendation Statement on Schedule 14D-9 with respect
to the tender offer. Gores Patriot Holdings, Inc., its wholly owned subsidiary,
and CompuDyne Corporation intend to mail these documents to the stockholders of
CompuDyne Corporation. These documents will contain important information about
the tender offer and stockholders of CompuDyne Corporation are urged to read
them carefully when they become available. Investors and stockholders of
CompuDyne Corporation will be able to obtain a free copy of these documents
(when they become available) and other documents filed by CompuDyne Corporation
or Gores Patriot Holdings, Inc. with the SEC at the website maintained by the
SEC at xxx.xxx.xxx. The tender offer statement and related materials may be
obtained for free by directing such requests to MacKenzie Partners Inc.,
attention Xxx Xxxxxx, at (000) 000-0000. In addition, investors and stockholders
may obtain a free copy of the solicitation/recommendation statement and such
other documents (when they become available) from CompuDyne Corporation by
directing requests to CompuDyne Corporation at 0000 Xxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000.
