Mace offered $46 million buyout by Kelly Capital

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Thursday, January 25, 2007

FORT LAUDERDALE, Fla.--Mace Security International, a manufacturer of personal-defense products and professional electronic security products, announced with an SEC filing Jan. 18 that Kelly Capital, an investment firm controlling $500 million in annual revenues, has offered to purchase all outstanding shares at $3 per share. This represents a total offer of roughly $46 million. In the filing, Mace said its board of directors is reviewing the offer and will respond, but offered no timeline for a response.
Eduardo Nieves, Mace vice president of marketing and investor relations, said he believed Kelly was already a shareholder. "They were at our recent annual meeting," he said. "We don't know who our shareholders are unless they tell us ... [Kelly has] expressed that they're shareholders." He couldn't speculate on how much stock Kelly might already own. When reached for comment, Kelly senior vice president Joe Altman said he couldn't answer any questions at this time.
Nieves couldn't say how long the board might consider the offer, but he did say that Mace's book value, based on the company's assets, was $3.78 a share. "So, their offer being under book value, that's not something that we'd typically want to do," he said. "But we'll look at it and get back to them and that could definitely start a discussion. This also shows that we're a good solid company that people want to invest in."
"We're a growing and public company," he continued, "and we're in a sector that investors want to be in. We entertain all deals, including companies that we might buy. If people are interested in us, we'll entertain those offers, too. It's all about maximizing shareholder value."
Part of that plan to maximize shareholder value involves divesting itself of its many car washes. In November, Mace signed an agreement to sell four facilities for $7.77 million; in December, Mace signed an agreement to sell 12 Arizona car washes for $19.25 million. The company still owns roughly 30 car washes, and Nieves said, "we're working aggressively to get out of the car-wash business."
In its most-recent financial filing, Mace reported $57 million in revenues for the previous 12 months, with $9.5 million in losses.
Kelly Capital was founded by brothers Michael and Richard Kelly. It reports an ability to complete individual transactions of up to $2 billion in conjunction with partners. Its mergers and acquisitions group focuses on "complicated transactions that enable us to leverage our ability to complete due diligence quickly and fund change of control transactions as principal with our own balance sheet," according to the company web site.