SAN FRANCISCO, May 10, 2010 (BUSINESS WIRE) -- New corporate filings indicate that the Board of Directors of infoGroup (NASDAQ-GS: IUSA), a national provider of sales and marketing leads, appears to have undervalued the company and are attempting to justify the low priced take-under at $8 per share by CCMP Capital Advisors, LLC through selective financial data that may not present an accurate picture of the value of the company.
"Based upon recent filings, it appears to us that in accepting the $8 per share price for CCMP, infoGroup's Board of Directors relied on overly conservative projections, minimized the company's cost savings and potential for profit growth, and failed to appropriately consider the company's historical valuation as well as that of publicly traded comparables and similar transactions," said Jose Medeiros, Managing Partner at Stonerise. "Indeed, infoGroup may be on pace for substantial improvements in profits in 2010 given the 30% rise in EBITDA achieved in the first quarter of this year." The details of how and why the infoGroup Board proposes to sell infoGroup at such low share price are outlined in a second letter sent today to the Board of Directors by Stonerise Capital Partners, a San Francisco-based investment firm that holds shares representing approximately 2.5% of infoGroup's outstanding common stock.
In particular, the sale process appears to have been initiated following unauthorized communications by former infoGroup CEO Vinod Gupta and pressure by Mr. Gupta whose personal liquidity needs appears to have trumped a rational analysis of whether a sale was in the best interests of infoGroup and its stockholders.
Stonerise is examining all legal and business options in its opposition to this proposed sale. Other investor groups have likewise opposed the proposed sale of infoGroup to CCMP.
"This sale price represents no premium for investors or any noticeable acknowledgement of infoGroup's improved fiscal performance," said Mr. Medeiros.
"In fact, the lack of premium leads us to question whether the company's stock could see an immediate benefit should this proposed deal be called off just like Cedar Fair's stock recently did." Cedar Fair, L.P. (NYSE: FUN), which was subject to a buyout offer from a financial investor, has seen its share price increase by 20% in the past month following the cancellation of the proposed sale due to shareholder objections. Mr. Medeiros added "It goes without saying that we do not intend to vote our shares in support of this transaction. We also believe that a material percentage of the company's shareholders share our view.
We hope these investors will join us in our effort to preserve the shareholder value that the company seems intent on giving away." A complete copy of Stonerise Capital Partners' latest letter to the infoGroup Board of Directors is available at www.stonerisecapital.com/infogroupboardletter2.pdf Stonerise Capital Partners is a San Francisco-based investment firm that manages a concentrated portfolio of strategic investments in public and private companies, focusing on long-term investments in companies that create lasting value for shareholders.
SOURCE: Stonerise Capital Partners CONTACT: Singer & Associates for Stonerise Capital Partners Sam Singer, 415-227-9700 Copyright Business Wire 2010 -0- KEYWORD: United States
California INDUSTRY KEYWORD: Professional Services
Public Relations/Investor Relations SUBJECT CODE: Economic News/Analysis