7/9/2009 5:30 AM
Back on March 12, 2009 MSC.Software Corporation announced that its Board of Directors had named 47-year-old Ashfaq A. Munshi interim Chief Executive Officer and President of the Company. These actions followed the relatively sudden resignations of William J. Weyand, Chairman and CEO and Glenn Wienkoop, President and COO, after four years. According to The Sunday Indian, Chief Executive William Weyand and President Glenn Weinkoop resigned because the company moved its governance structure towards current best practices and sought to separate the roles of CEO and Chairman.
The Board of Directors also named then-current board members Donald Glickman and Robert A. Schriesheim to serve as non-executive co-chairmen, effective March 12. The Board of Directors also retained a national firm to conduct a search for a permanent CEO.
Munshi has been a Director of MSC since July 2005. Earlier, he was a corporate vice president at Applied Materials, responsible for software and automation. Previously he was VP/GM of the Enterprise Business Unit at Silicon Graphics and prior to that he was director of development and marketing at Oracle.
Ashfaq Munshi later said of MSC’s Q1 2009 financial results, "In line with our guidance, total revenue decreased 12% in the first quarter versus last year. While software declined 21%, we achieved profitability and delivered $1.5 million of operating income. As a consequence of cost containment measures, we continue to see favorable trends in our cost structure." He concluded, "My focus as interim CEO is to evaluate and allocate resources consistent with a performance-driven approach to managing the business, while at the same time making sure that our products and the way we do business is aligned with our customers' requirement."
MSC.Software Corporation made news again yesterday (July 8, 2009), when it announced that it had entered into a definitive agreement with affiliates of Symphony Technology Group (STG) under which a company controlled by STG will acquire all of MSC's outstanding shares in a one-step cash merger transaction valued at approximately $360 million. Under the terms of the agreement, MSC's stockholders will receive $7.63 in cash for each share of MSC common stock. This price per share represents approximately a 13% premium to the closing price per share of MSC's stock prior to this announcement and approximately a 24% premium compared to the 90 trading-day trailing closing average price per share.
"After a careful and thorough review of all strategic alternatives available to MSC, the MSC Board of Directors has approved this agreement as it represents the best option for our stockholders," said Ash Munshi, Interim Chief Executive Officer and President of MSC. "This decision is the culmination of a long process of review and examination, and in addition to maximizing value for our stockholders, provides excellent opportunities for our employees and customers."
MSC's Board of Directors has approved the merger agreement and will recommend that stockholders adopt the agreement. In connection with the transaction, stockholders representing approximately 14% of the outstanding shares of MSC, including the company's largest stockholder Elliott Associates and all of the company's directors and executive officers, have entered into voting agreements to vote in favor of the transaction. Elliott Associates has also committed to provide debt and equity financing to help finance the transaction. Wells Fargo Foothill, part of Wells Fargo & Company (NYSE:WFC), and CapitalSource Bank have committed to provide senior debt financing.
The entire MSC.Software Corporation Press Release may be found at this URL:
As is frequently the case in such transactions, the MSC announcement has sparked claims by several law firms around the country, alleging that the “deal appears to be unfair, given the fact that on June 1, 2009, MSC Software shares were trading at the exact price now offered, and that throughout 2008, MSC Software traded at significantly above the offer price, and as recently as October 2008, was trading above $10.25 a share, substantially higher than the current offer.”
We’ll have to wait and see if any of these claims has any merit whatsoever.