Mod-Pac Corp.’s 11-month takeover saga ended Monday, with shareholders voting to approve the $24.6 million bid by the company’s two top executives to take the Buffalo specialty printing company private.
The bid by a group led by company CEO Daniel G. Keane and his father, Kevin, Mod-Pac’s chairman, to acquire all of the stock they do not already own in the firm for $9.25 per share in cash won the support of more than two-thirds of the company’s shareholders, excluding the large stake held by the Keane family.
“The transaction to a private company will be seamless for our customers and employees,” Daniel Keane said. “We’re going to continue to remain based in Buffalo, and we’re going to continue to serve our customers, so we’re looking forward to that.”
The company, which has about 375 employees at its Elmwood Avenue factory, had about $59 million in sales last year. The company has been profitable for the last three years after a long struggle to rebuild its business following the loss of its biggest customer midway through the last decade.
The Keanes initially offered to buy the company for $7.40 per share in late October. They sweetened their bid by 17 percent, to $8.40 per share, during April in response to shareholder complaints that the price was too low and did not reflect the recent improvement in the company’s sales and profits.
The Keanes again hiked their bid earlier this month – this time by 10 percent to $9.25.
That was part of an agreement that led to a group of shareholders, who had opposed the proposed deal because they viewed the offer as too low, to drop their lawsuits and agree to support the buyout offer.
Mod-Pac solidified the transition to privately held on Friday at a special shareholders meeting attended by 10 people at the Hodgson Russ law firm’s offices. The Keanes shared a hug after the meeting adjourned.
Kevin Keane reflected on Mod-Pac’s change to privately held status.
“I think it’s unfortunate that the climate for public companies is very demanding and expensive,” he said. “But I think to me, the sadness is that you can’t share this much more broadly.
“But the viability of a small business really exists in being private. It’s just a very expensive structure otherwise. But we’re happy to be involved still, and I think there’s a lot of future."