Founders leave IASG board, seek a buy back
ALBANY, N.Y.--Founders of Integrated Alarm Services Group Tim McGinn and Tom Few will attempt to purchase the publicly traded company after stepping down from the board of directors June 15.
The shareholder group collectively owns 10.49 percent of IASG and filed a joint filing and solicitations agreement to solicit proxies for the approval of its proposals to capitalize shareholder value through an acquisition, according to a filing with the U.S. Securities and Exchange Commission last week.
Former chairman and chief executive officer McGinn and former chief operating officer Few were removed from their positions by the company's board this spring.
Joe Reinhart, investor relations for IASG, said the announcement would not affect the company's current restructuring strategy.
"If it turns out these parties are in a position to make some form of bid or offer for the company, the company would take whatever they have to say very seriously and consider it as part of its evaluation," Reinhart said.
That same day, the holding company for Criticom International elected Jason Mudrick, a portfolio manager at hedge fund company Contrarian Capital Management, to sit on the board of directors.
In November, Contrarian, owning 13 percent of the company, addressed IASG in a letter from Mudrick about the company's financial struggle and advised that the company sell. The plea from the company's largest shareholder provoked IASG to examine its business strategy by hiring an independent investment bank, Allen & Company.
Jack Mallon, managing director of investment bank Mallon Associates, said it's another chapter in the battle between the founding shareholders and investor Contrarian.
"Obviously there is an ongoing dispute between the two factions to control the company. Contrarian won, in a sense." Mallon added, the question really is "whether Contrarian forced the resignation of the board in a final step in disassociating them from the management of the company, or whether McGinn and Few decided it would be in their best interest to not be members of the board while they were attempting to buy back the company."
However, Reinhart said the addition of Mudrick to the board has no affect on the company's plans to sell. "Certainly, the board of directors, including our newest director, are interested in increasing shareholder value," Reinhart said.
Mallon said, whether part of the board or not, the influence of the investor company was very apparent. "The largest shareholder has been able to effectuate these changes ... not from the vantage point of a board member but as a dominant shareholder. So his being on the board makes it more visible, but not necessarily more influential."
Preceding these events, last week the board of directors received the Allen & Company report reviewing strategic options for the company. The report contains analysis and presents options for the company's next move. It will be reviewed by the committee, but will not be released to the public, according to a written statement.