Item
1.01. Entry into a Material Definitive
Agreement.
On
February 15, 2008 The Midland Company, an Ohio corporation (“Midland” or the
“Company”) entered into a Stock Purchase Agreement (“Agreement”) with M/G
Transport Holdings LLC, a Delaware limited liability company and affiliate of
Brooklyn NY Holdings LLC
(the “Buyer”) pursuant
to which the Company agreed to sell all of its shares of capital stock of M/G
Transport Services, Inc., an Ohio corporation (“M/G Transport”) and MGT
Services, Inc., an Ohio corporation (“M/G Services,” and collectively with M/G
Transport, the “Barge Companies”). Pursuant to this Stock Purchase
Agreement the Barge Companies would be sold to Buyer for an aggregate purchase
price of approximately $112.8 million, subject to a working capital
adjustment. The Agreement contemplates that the deposit of funds
shall be made to an escrow agent on February 29, 2008 in connection with the
closing, which is expected to occur in April 2008.
The
transactions contemplated by the Agreement are conditional upon the consummation
of the transactions contemplated by the Agreement and Plan of Merger among
Midland, Munich-American Holding Corporation and Monument Corporation dated
October 16, 2007 (the “Merger Agreement”), clearance under the Hart-Scott-Rodino
Antitrust Improvements Act, as well as other customary closing conditions.
Concurrent with the negotiations of the Agreement, the Buyer required
the retention of the Barge Companies’ management team, including Joseph P.
Hayden III, Midland's Chairman and Chief Operating Officer, as well as a
minority investment from him.
The
Agreement contains certain termination rights for both the Company and Buyer and
provides that, upon termination of the Agreement under certain circumstances,
including the termination of the Merger Agreement or if the transactions
contemplated by the Agreement fail to close by July 31, 2008, the
Company may be obligated to pay Buyer a termination fee of approximately $1.13
million.
Cautionary
Notice Regarding Forward Looking Statements
Certain
statements in this report contain forward-looking statements, including
statements relating to the expected timing, completion and effects of the
proposed transactions contemplated by the Agreement. Forward-looking statements
are statements other than historical information or statements of current
condition. These forward-looking statements are based on current expectations,
estimates, forecasts and projections of future company or industry performance
based on management’s judgment, beliefs, current trends and market conditions.
Actual outcomes and results may differ materially from what is expressed,
forecasted or implied in any forward-looking statement. Forward-looking
statements made by Midland may be identified by the use of words such as “will,”
“expects,” “intends,” “plans,” “anticipates,” “believes,” “seeks,” “estimates,”
or the negative versions of those words and similar expressions, and by the
context in which they are used. There are a number of risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements included in this document. For example, (1) regulatory
approvals required for the transaction may not be obtained, or required
regulatory approvals may delay the transaction or result in the imposition of
conditions that could have a material adverse effect on Midland or Buyer or
cause the parties to abandon the transaction; (2) conditions to the closing
of the transaction may not be satisfied; (3) the business of Midland or
Buyer may suffer as a result of uncertainty surrounding the transaction; and
(4) Midland or Buyer may be adversely affected by other economic, business,
and/or competitive factors. These and other factors that could cause Midland’s
actual results to differ materially from those expressed or implied are
discussed under “Risk Factors” in Midland’s most recent annual report on Form
10-K and other filings with the Securities and Exchange Commission. Additional
risks and uncertainties not currently known to us or that we currently deem to
be immaterial also may materially adversely affect our proposed transaction,
business, financial condition and/or operating results. For a further discussion
of these and other risks and uncertainties affecting Midland, see Midland’s
website at
www.midlandcompany.com
.
Midland undertakes no obligation to update any forward-looking statements,
whether as a result of new information or circumstances, future events (whether
anticipated or unanticipated) or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements.
