Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowTwo executives of Fortune Industries Inc. who began pursuing a shareholder buyout nearly a year ago have agreed to purchase the company for $13.3 million.
The Indianapolis-based personal employer organization revealed in a public filing earlier this month that the proposed buyer is CEP Inc., a holding company led by Fortune Industries CEO Tena Mayberry and Chief Financial Officer Randy Butler.
CEP would be based in Nashville, Tenn.
The filing says the two will pay $7 million in cash and the remaining $6.3 million with a promissory note to acquire common and preferred shares held by the estate of company founder Carter Fortune, who died in August.
In addition, Mayberry and Butler will pay stockholders owning less than 500 shares 61 cents per share, or a total of $56,718. Shareholders with more than 500 shares will continue to own their stock, amounting to a 10-percent stake in the company.
Fortune Industries’ sale to Mayberry and Butler would end months of uncertainly about the future of the company.
Most recently, Fortune Industries terminated its purchase agreement in January with skilled-nursing operator Ide Management Group LLC of Greenfield.
Fortune Industries had planned to exit the PEO business in favor of becoming a skilled-nursing operator following the death of Fortune.
Under the unusual proposal, Fortune Industries would have remained a public company and abandoned its previous plan to be taken private.
The restructuring hinged on shareholder approval of a merger agreement with Ide that would have given Ide Management CEO Mark Ide shares in Fortune Industries. Founded by Ide in 1997, IMG owns or manages 20 skilled-nursing facilities in Indiana, Illinois, Iowa and Wisconsin.
But Mayberry and Butler first bid for Fortune Industries last March, before Fortune died and before the company considered the Ide proposal. Similar to their original bid, the latest offer from the two will result in the company going private.
Mayberry and Butler plan to acquire company shares from Carter Fortune’s estate and use them to buy out Fortune Industries’ PEO subsidiaries, which would operate within CEP.
Fortune realized a profit of $120,000 on revenue of $13.7 million in the quarter ended Dec. 31.
Shares of the thinly traded company were at 23 cents each Thursday morning, up one penny.
Please enable JavaScript to view this content.