Vermont Teddy Bear (NASDAQ:BEAR)
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Vermont Teddy Bear Company to Be Taken Private; Stockholders to
Receive $6.50 in Cash Per Share
SHELBURNE, Vt., May 16 /PRNewswire-FirstCall/ -- The Vermont Teddy Bear
Company(R) (NASDAQ:BEAR) today announced the signing of a definitive agreement
that will enable the Company to be taken private by an investment group led by
The Mustang Group, LLC, a Boston-based private equity firm.
The Company entered into this agreement following the unanimous recommendation
of the members of the Company's Board of Directors, based on a unanimous
recommendation of a Special Committee comprised of independent directors.
Under the terms of the agreement, the Company's common stockholders not
continuing as investors in the Company will receive $6.50 in cash per share of
the Company's common stock upon the closing of the transaction which is
anticipated to occur on or before September 30, 2005.
Following the closing of the transaction, Vermont Teddy Bear Company ownership
shall continue to include significant participation by Vermont investors. The
investors include members of the Company's management team and FreshTracks
Capital, a Middlebury, Vermont-based investment firm. Collectively, Vermonters
will own more than 20% of the Company.
Elisabeth B. Robert, President and Chief Executive Officer of The Vermont Teddy
Bear Company, stated, "This transaction brings significant value to our
stockholders and enables Vermont Teddy Bear to continue to build upon our
leading position in the gift delivery industry. As a private company, Vermont
Teddy Bear will no longer face the challenges of a small company trying to
comply with increasingly complex and costly public company requirements. We
will have more time and resources to devote to growing our business. Mustang
has enabled us to make this possible and we welcome the opportunity to work
with Mustang on what we believe is an exciting next step in our Company's
growth."
Carson Biederman, managing partner of The Mustang Group, LLC, said, "Mustang
looks forward to a long-term partnership with The Vermont Teddy Bear Company
and its top-notch management team led by Elisabeth Robert. The Vermont Teddy
Bear Company has built a premier platform in the premium gift delivery business
supporting such brands as Calyx & Corolla, PajamaGram and TastyGram. Mustang
is excited to participate in the next stage of growth for Vermont Teddy Bear
Company, which will involve acquisitions of other premium gift companies, and
continued investment in new product development."
Following the transaction, Ms. Robert will continue in her position as
President and CEO of the Company, as will the Company's executive officers;
Irene Steiner, Vice President of Marketing; Catherine Camardo, Vice President
of Operations; and Mark Sleeper, Chief Accounting Officer. Ms. Robert will
maintain her equity holdings, and certain other longstanding stockholders will
remain investors in the Company. Certain of the Company's principal
stockholders, who collectively own approximately 57% of the outstanding shares
of the Company's common stock, have agreed to vote their voting shares in favor
of the transaction.
The Mustang Group, LLC is a private equity firm that invests in middle- market
companies throughout North America. Mustang's first investment was in Cascade
Lacrosse, a leading manufacturer of lacrosse equipment that is based in upstate
New York.
The closing of the transaction is subject to certain terms and conditions
customary for transactions of this type, including stockholder approval and
completion of customary documents pertaining to the Company's committed
financing. Stockholder approval will be solicited by The Vermont Teddy Bear
Company by means of a proxy statement, which will be mailed to the Company's
stockholders upon the completion of the required Securities and Exchange
Commission filing and review process. The equity financing necessary for the
transaction has been committed by an investment group led by The Mustang Group,
LLC. Co-investors include FreshTracks Capital L.P., a venture capital fund
devoted to financing growth company opportunities in Vermont. The debt
financing necessary for the transaction has been committed by Banknorth, NA.
Covington Associates LLC of Boston is serving as the Company's financial
advisor in connection with the proposed transaction. Houlihan, Lokey, Howard &
Zukin Financial Advisors, Inc. of New York is serving as financial advisor to
the Special Committee of the Board of Directors. The Company is represented by
its general counsel, the law firm Dinse, Knapp & McAndrew P.C. of Burlington,
Vermont. The Special Committee of the Company's Board of Directors is
represented by the law firm Akin Gump Strauss Hauer & Feld LLP of New York.
Mustang is represented by the law firm Goulston & Storrs of Boston.
The proxy statement that The Vermont Teddy Bear Company plans to file with the
Securities and Exchange Commission and mail to its stockholders will contain
information about The Vermont Teddy Bear Company, The Mustang Group, LLC,
FreshTracks Capital L.P., and the proposed transaction. Stockholders are urged
to read the proxy statement carefully when it is available. In addition to
receiving the proxy statement from the Company in the mail, stockholders will
also be able to obtain the proxy statement, as well as other filings containing
information about the Company, without charge, at the Securities and Exchange
Commission's web site (http://www.sec.gov/). Stockholders may also obtain
copies of these documents without charge by requesting them in writing from The
Vermont Teddy Bear Company, P.O. Box 965, 6655 Shelburne Road, Route 7,
Shelburne, Vermont 05482; or by telephone at (802) 985-3001.
Forward-Looking Statements
This press release contains various "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 regarding the
proposed transaction between The Vermont Teddy Bear Company and The Mustang
Group, LLC and involving risks and uncertainties related to the occurrence of
future events. These forward-looking statements are based on management's
current expectations, assumptions, estimates and projections about the current
economic environment, the Company and its industry. Certain factors that could
cause actual events not to occur as expressed in the forward-looking statement
include, but are not limited to, (i) the failure to obtain the necessary
stockholder approval or to complete the required financing in a timely manner
or at all and (ii) satisfaction of various other closing conditions contained
in the definitive merger agreement. Other potential risks and uncertainties are
discussed in the Company's reports and other documents filed with the
Securities and Exchange Commission from time to time. The Vermont Teddy Bear
Company assumes no obligation to update the forward-looking information. Such
forward looking statements are based upon many estimates and are inherently
subject to significant economic and competitive uncertainties and
contingencies, many of which are beyond the control of management of the
Company. Inclusion of such forward-looking statements herein should not be
regarded as a representation by the Company that the statements will prove to
be correct.
This press release should be read in conjunction with the Company's Current
Report on Form 8-K filed today and other reports filed with the Securities and
Exchange Commission.
A Vermont Teddy Bear Company Bear-Gram gift is a popular alternative to sending
flowers. Each Bear-Gram gift includes a customized Vermont Teddy Bear
accompanied by a personal greeting card and candy treat, all packaged in a
colorful gift box with an air hole.
Orders are placed by calling 1-800-829-BEAR or by shopping at
http://www.vermontteddybear.com/.
The PajamaGram Company is a gift delivery service where customers can pamper
their loved ones by sending pajamas and spa products in luxurious packaging by
calling 1-800-GIVE-PJS or shopping at http://www.pajamagram.com/.
The TastyGram Company specializes in the delivery of creatively packaged,
deliciously presented gourmet foods and sweets by with a personalized greeting
card calling 1-800-82-TASTY or shopping at http://www.tastygram.com/.
Calyx & Corolla delivers premium direct-from-the-grower floral gifts through
its catalog, by phone at 1-800-800-7788 or online at
http://www.calyxandcorolla.com/.
DATASOURCE: The Vermont Teddy Bear Company
CONTACT: Nicole L'Huillier of The Vermont Teddy Bear Company,
+1-802-985-1362,
Web site: http://www.vermontteddybear.com/