Fortune Industries Announces Restructured Merger Agreement
Fortune Industries (NYSE: FFI) announced today that it has reached an agreement in principal to restructure its current merger agreement by planning to enter into an amended merger agreement with Ide Management Group, LLC ("Ide"), a skilled nursing facility management group headquartered in Greenfield, Indiana (the "Amended Agreement"). The Amended Agreement is subject to final documentation, completion of due diligence, regulatory compliance and other normal contingencies. Once completed, a revised Proxy Statement and the Amended Agreement will be filed with the SEC for review. Further, the Amended Agreement will result in the Company remaining registered with the Securities and Exchange Commission, and it is anticipated that it will continue to be publicly traded. Current shareholders of the Company will continue to own their Company shares.
"This Amended Agreement provides current Company shareholders the opportunity to continue to own shares in a publicly-traded entity, which we believe should enhance their liquidity," stated Tena Mayberry, Chief Executive Officer of the Company.
In connection with the Amended Agreement, the Company will exchange all of its professional employer organization ("PEO") subsidiaries for all of the common and preferred shares owned by the late Carter M. Fortune and by CEP, Inc., a Tennessee corporation which had previously entered into a merger agreement with the Company to acquire all the Company's PEO operations. As a result of the revised transaction structure, the Company will cease being in the PEO business and through its newly acquired Ide subsidiaries, will operate a chain of 20 skilled nursing facilities located in Indiana, Illinois, Iowa and Wisconsin.
The Amended Agreement provides that Ide will merge with a to-be formed subsidiary of the Company, and become a wholly-owned subsidiary of the Company. Mark Ide, the sole member of Ide, will receive sufficient shares of the Company in exchange for all full ownership of Ide. As a result, Mr. Ide will own a substantial majority of the Company shares. In addition, Ide will pay the Company three hundred thousand dollars ($300,000) as part of the transaction, which has been deposited into an escrow account with an independent third-party bank.
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