WASHINGTON -- (Business Wire)
DC Capital Partners, LLC ("DC Capital"), a private investment firm
headquartered in Washington, D.C., today sent a letter to the Board of
Directors of Michael Baker Corporation (“Michael Baker”) (NYSE MKT:
BKR), an engineering, design, planning and construction services
company, and amended its 13D in Michael Baker accordingly.
The full text of the letter is below:
Members of the Board of Directors
c/o Richard L. Shaw, Chairman
Airside Business Park
100 Airside Drive
Township, PA 15108
Dear Mr. Shaw and Members of the Board of Directors:
Thank you for your leadership to date.
As a significant individual shareholder of Michael Baker Corporation
("Michael Baker" or the "Company"), I appreciate your attempts to
enhance value through the recent short term actions to repurchase the
Company's stock and institute a dividend; however, I believe they are
insufficient. The Company's long term growth strategy has resulted, and
I believe will continue to result, in a significant undervaluation of
the stock. Specifically, over the past five years, the Company has
engaged in an acquisition strategy, including over $100 million in
invested capital since 2010, which has not provided any significant
value creation to shareholders. Over the same period, Michael Baker's
stock price declined over 40%.
I did appreciate your facilitating our recent meeting with management,
although I was surprised and somewhat alarmed by the abrupt departure of
the President and Chief Executive Officer, Mr. Mallory, as he led our
As you know, DC Capital Partners, LLC has a controlling interest in
Gladiator HoldCo, LLC and its subsidiary, KS International, LLC ("KSI"),
a provider of mission critical operational support to government
agencies. I have been reviewing growth strategies for KSI, and given
Michael Baker's current position, it is my belief that a combination of
KSI and Michael Baker is the best course of action.
We propose to have KSI purchase the Company in an all cash transaction
at $24.25 per share outstanding. That price represents a 26% premium
over the stock's thirty day trailing average closing price on December
18, 2012. We are in discussions with investment banks and other
financial institutions and expect to have fully executed, underwritten
financing commitments in the near future.
We are prepared to proceed immediately to negotiate and execute
definitive documents. We envision signing a confidentiality agreement,
but we do not believe it would be in any party's interest, particularly
your shareholders, to sign a standstill agreement.
We believe our proposal is compelling and in the best interest of all
constituents, including your shareholders, employees, and customers.
I am available to discuss this offer at your convenience. In advance,
thank you for your consideration.
Thomas J. Campbell
About DC Capital Partners, LLC
DC Capital Partners, LLC is a private investment firm headquartered in
Washington, DC focused on making control investments in middle market
companies that provide differentiated and innovative services and
solutions to the U.S. federal government. DC Capital's investment
strategy emphasizes sectors that it believes offer the most compelling
growth opportunities including but not limited to Intelligence,
Information Technology, Development, Security, Infrastructure and
Construction and Environmental. Learn more at www.dccapitalpartners.com.
Sard Verbinnen & Co
Anna Cordasco / Jared Levy
Source: DC Capital Partners, LLC