Attached files
file | filename |
---|---|
8-K - Orchard Enterprises, Inc. | v177301_8k.htm |
EX-2.1 - Orchard Enterprises, Inc. | v177301_ex2-1.htm |
Exhibit
99.1
FOR IMMEDIATE
RELEASE
THE
ORCHARD SIGNS MERGER AGREEMENT WITH DIMENSIONAL ASSOCIATES
New York – March 16, 2010
–The Orchard, a
global leader in music and video distribution and comprehensive digital
strategy, announced today that it has entered into a definitive merger agreement
with Dimensional Associates, LLC, a private equity affiliate of JDS
Capital, L.P. Dimensional currently owns approximately 42% of the Company’s
outstanding common stock and 99% of the Company’s outstanding Series A Preferred
Stock, representing an aggregate of approximately 53% of the Company’s voting
securities.
Following
the unanimous recommendation and approval of a Special Committee of independent
and disinterested directors, the Board of Directors of The Orchard (other than
Daniel C. Stein, who abstained from voting on the matter due to his position as
an executive of Dimensional Associates) has approved the merger agreement and is
recommending to The Orchard’s stockholders that they adopt and approve the
merger agreement. Under the terms of the merger agreement, Dimensional
Associates will acquire all of the common stock of The Orchard not currently
owned by it or its affiliates for $2.05 per share and stockholders will also
receive a contingent right to receive additional consideration,
under certain circumstances post-closing if Dimensional Associates or any of its
affiliates enters into a commitment to sell at least 80% of The Orchard’s voting
securities or assets within six months of the consummation of the merger.
The $2.05 per share consideration represents a 52% premium to the closing price
of The Orchard’s common stock on October 14, 2010, the day before Dimensional
Associates first presented its acquisition proposal to The Orchard’s Board of
Directors and a 21% premium to the closing price of The Orchard’s common stock
on March 15, 2010, the last trading day prior to the announcement of the
execution of a definitive merger agreement.
The
proposed transaction is expected to close in the third quarter of this calendar
year, subject to customary closing conditions, including the absence of any
material adverse change affecting The Orchard’s business prior to
closing. In addition, the transaction is subject to the approval of
the merger agreement by holders of a majority of the outstanding shares of The
Orchard’s common stock not owned by Dimensional Associates or its affiliates at
a meeting of stockholders to be held on a date to be announced. If The Orchard’s
stockholders approve the merger, following the closing under the merger
agreement, The Orchard will be owned by Dimensional Associates and will return
to private company status.
Under the
terms of the merger agreement, The Orchard’s Special Committee will oversee a 30
day go-shop period ending April 14, 2010 to determine if there are any other
interested buyers for The Orchard. The Special Committee has retained
Craig-Hallum Capital Group LLC to coordinate its solicitation activities during
the go-shop period.
"The
Special Committee of the Board has an obligation to our shareholders to review
and evaluate The Orchard's options for creating shareholder value," said Michael
Donahue, Chairman of the Board and the Special Committee for The Orchard. "We
have undertaken an intensive review of The Orchard and its value, both
independently and with the assistance of a financial advisor. We have negotiated
a fair price, while also demanding the right to solicit additional potential
buyers. In order to ensure that our shareholders concur with our conclusion, we
have conditioned the consummation of the merger on its approval by a majority of
the minority shareholders."
“Dimensional
Associates has always been a strong supporter of The Orchard and our management
team in delivering services and content to our clients and retail partners,”
said Brad Navin, CEO of The Orchard.
Dimensional
Associates was the primary owner of The Orchard from 2003 until the reverse
merger with DMGI in November 2007 and has continued to be the majority owner.
Daniel C. Stein, an executive of Dimensional Associates, has been a member of
The Orchard’s Board of Directors since 2007.
About
The Orchard(R)
Headquartered
in New York and London with operations in 25 markets around the world, The
Orchard (NASDAQ: ORCD) is an independent music and video distributor
specializing in comprehensive digital strategies for content owners. Through
innovative global marketing and promotions, The Orchard drives sales across more
than 660 digital and mobile storefronts in 75 countries, as well as physical
retailers across North America and Europe. The company was founded in 1997 as a
business partner that fosters creativity and independence within its global
clients. For further information, please visit www.theorchard.com.
Forward
Looking Statements
This
release may contain certain forward-looking statements regarding The Orchard's
expectations regarding future events and operating performance within the
meaning of Federal Securities laws that are subject to certain risks and
uncertainties and involve factors that may cause actual results to differ
materially from those projected or suggested. Factors that could cause actual
results to differ include, but are not limited to: the growth of the digital
music and video markets; the impact of the general economic recession and
management’s ability to capitalize on our business strategy and take advantage
of opportunities for revenue expansion; satisfaction of the conditions of the
pending merger with Dimensional Associates, including the approval of a majority
of the stockholders unaffiliated with Dimensional Associates; the costs and
expenses associated with the pending merger; contractual restrictions on the
conduct of The Orchard’s business included in the merger agreement; the
potential loss of key personnel, disruption of our sales and operations or any
impact on The Orchard’s relationships with third parties as a result of the
pending merger; any delay in consummating the proposed merger with Dimensional
Associates or the failure to consummate the transaction; and the outcome of, or
expenses associated with, any litigation which may arise in connection with the
pending merger with Dimensional Associates. Undue reliance should not be placed
on such forward-looking statements as they speak only as of the date hereof, and
The Orchard undertakes no obligation to update these statements to reflect
subsequent events or circumstances except as may be required by law. Additional
factors that could cause actual results to differ materially from those
projected or suggested in any forward-looking statements are contained in The
Orchard's most recent periodic reports on Form 10-K and Form 10-Q that are filed
with the Securities and Exchange Commission (the “SEC”). The Orchard intends to
file with the SEC a preliminary proxy statement in connection with the proposed
merger and to mail a definitive proxy statement and other relevant documents to
The Orchard’s stockholders. Stockholders of The Orchard and other
interested persons are advised to read, when available, The Orchard’s
preliminary proxy statement, and amendments thereto, and definitive proxy
statement in connection with The Orchard’s solicitation of proxies for the
stockholders meeting to be held to approve the merger and the merger agreement
because these proxy statements will contain important information about The
Orchard, Dimensional and the proposed merger. The definitive proxy
statement will be mailed to stockholders as of a record date to be established
for voting on the merger and the merger agreement. Stockholders will
also be able to obtain a copy of the preliminary and definitive proxy
statements, without charge, once available, at the SEC’s internet site at
http://www.sec.gov or by directing a request to: Attention: Secretary, The
Orchard Enterprises, Inc., 23 East 4th Street, 3rd Floor, New York, New York
10003.
The
Orchard and its directors and executive officers may be deemed participants in
the solicitation of proxies from The Orchard’s stockholders. A list
of the names of those directors and the executive officers and descriptions of
their interests in The Orchard is contained in The Orchard’s proxy statement
dated April 29, 2009, and The Orchard’s Form 8-K dated February 22, 2010, which
are filed with the SEC, and will also be contained in The Orchard’s proxy
statement when it becomes available. The Orchard’s stockholders may
obtain additional information about the interests of its directors and executive
officers in the merger by reading The Orchard’s proxy statement when it becomes
available.
CONTACT:
Ed
James
Cornerstone
PR
212 652
9295
ed@cornerstonepromotion.com
Source:
The Orchard