The Orchard Agrees To Dimensional Assoc. Buyout
March 17, 2010 at 4:36 PM (PT)
Indie music/video distributor THE ORCHARD has agreed to merge 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.
The ORCHARD's Board of Directors approved the merger agreement and has recommended that THE ORCHARD's stockholders adopt and approve the merger agreement. Under the terms of the deal, 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 14th, 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 15th, 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. If the merger is approved, THE ORCHARD will be owned by DIMENSIONAL ASSOCIATEs and will return to private company status.