BARRINGTON, Ill., Feb. 5 /PRNewswire-FirstCall/ -- Clark Consulting a national firm dedicated to helping companies keep their best people through integrated compensation, benefits and funding solutions, today announced that on January 30, 2007, Clark, Inc., a Delaware corporation (the "Company"), entered into a First Amendment (the "Amendment"), effective as of January 29, 2007, to the Asset Purchase Agreement (the "Sale Agreement"), dated as of November 1, 2006, by and among the Company, Clark Consulting, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, Clark Wamberg, LLC, a Delaware limited liability company ("C-W Co.") and Tom Wamberg, Chairman and Chief Executive Officer of the Company, as a joint obligor with C-W Co. The Amendment and Sale Agreement relate to the pending purchase of certain assets, and the assumption of certain liabilities of the Company (collectively, the "MBO Businesses") by C-W Co., and was accompanied by a supplemental letter from C-W Co. and Mr. Wamberg as more fully described below. The Sale Agreement was entered into in connection with the Agreement and Plan of Merger dated as of November 1, 2006 by and among the Company, AUSA Holding Company ("AUSA") and AUSA Merger Sub, Inc., and the related tender offer by AUSA to purchase outstanding shares of the Company's common stock for $16.55 per share (the "Offer Price"), which is presently pending.
The Amendment provides that the purchase price for the MBO Businesses shall be increased from $35.4 million to $46.5 million, an increase of approximately $11.1 million. As previously disclosed, pursuant to the Merger Agreement, the Offer Price is to be increased by AUSA on a per share basis by up to 61.7% of the amount by which the net proceeds from the sale of the MBO Businesses, on a per share basis, exceeds the $35.4 million purchase price under the Sale Agreement after establishment of an escrow, if any.
Pursuant to the terms of the Sale Agreement, the Company actively solicited other potential buyers for all or any portion of the MBO Businesses following the commencement of the tender offer on December 13, 2006. The Company only received one competing proposal for the MBO Businesses, which was from affiliates of a private equity firm (the "Investor Group"), which the Company understands to be working with certain members of the Company's senior management team, including Thomas Pyra, the Company's President and Chief Operating Officer. In connection with such proposal, the Company agreed to reimburse the Investor Group for $100,000 of their expenses if the Company accepted a proposal from another buyer. The Special Committee of the Board of Directors of the Company determined the Investor Group's proposal was superior to the transaction with C-W Co. under the Sale Agreement. Pursuant to the right of C-W Co. to match any competing bid under the Sale Agreement, C-W Co. countered with a proposal which resulted in the Amendment. The Special Committee recommended, and the Board of Directors approved, the Amendment subject to the condition that C-W Co. and Mr. Wamberg deliver to the Special Committee a supplemental letter acknowledging, among other things, the Company's right to consider and respond to any other proposal or offer that may subsequently be received by the Special Committee or the Board of Directors from any other party.
Pursuant to the terms of the Sale Agreement, as amended by the Amendment (and as acknowledged by C-W Co. and Mr. Wamberg), the Company retained the right to solicit, receive, consider and respond to additional proposals for the MBO Businesses. In this regard, after entering into the Amendment, the Company received a new offer from the Investor Group to purchase the MBO Businesses for $48.5 million, which it is presently evaluating. The terms of such offer include a $2 million breakup fee. Although the Company has not accepted such offer at this time, the Company has agreed to pay $1 million to the Investor Group if the Company accepts an improved offer from another party (including C-W Co., Mr. Wamberg and their affiliates). The completion of any alternative transaction to the Sale Agreement is subject to the approval of AUSA. There can be no assurance that any additional proposals will be made for the MBO Businesses. Accordingly, the final purchase price and terms of the purchase of the MBO Businesses cannot be determined at this time, and therefore the extent of any related increase in the Offer Price can not yet be determined.
This press release is for informational purposes only and is not an offer or solicitation to purchase, nor a recommendation to sell, any shares of Clark's common stock. The solicitation of offers to purchase the Clark common stock is only being made pursuant to the Offer to Purchase and related materials that Purchaser has provided to its Clark stockholders, which have been filed with the Securities and Exchange Commission. Clark stockholders and other investors should read the Offer to Purchase and related materials that Purchaser initially filed with the Securities and Exchange Commission on December 13, 2006, and as may be amended.
Founded in 1967, Clark Consulting is a firm with expertise in executive compensation and benefit design, funding and plan administration. With more than 3,800 corporate, banking and healthcare clients, the Company's mission is helping companies keep their best people.
Forward Looking Statements
This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially. Such forward-looking statements are based on the beliefs of Clark's management as well as assumptions made by and information currently available to Clark's management. There is a risk that the transaction could be delayed or fail to close, and stockholders will not receive the expected benefits. Such risks include, but are not limited to:
- that a governmental or regulatory authority may prohibit or delay the
consummation of the transaction,
- adverse developments in previously disclosed shareholder litigation,
- that our stockholders or a governmental or regulatory authority may
institute additional legal proceedings against us that have a
materially adverse effect on our business or our ability to complete
the above described transaction, and
- that our business is materially and adversely affected by other events,
including industry and economic conditions outside of our control.
If the transaction does not close, our stock price may significantly decrease, and it may materially impact our business. Among other things, we could lose customers and employees, and our management could be distracted. For additional uncertainties and risks we face, please see our Annual Report on Form 10-K for the fiscal year ended December 31, 2005, our subsequent quarterly reports on Form 10-Q, and our current reports filed on Form 8-K.
