Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): April 2, 2008
FMG
ACQUISITION CORP.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-52833
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75-3241964
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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Four
Forest Park, Second Floor
Farmington,
Connecticut
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06032
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (860)
677-2701
Not
Applicable
(Former
name or former address, if changed since last report)
| x |
Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|
| x |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
|
| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
On
April
2, 2008, FMG Acquisition Corp. (“FMG”) issued a press release with respect to
the execution of an Agreement and Plan of Merger (“Merger Agreement”) with
United Insurance Holdings, L.C., a limited liability company formed in the
State
of Florida (“United”) and United Subsidiary Corp., a wholly-owned subsidiary of
FMG (“United Subsidiary”). Pursuant to the Merger Agreement, FMG agreed to
purchase all of the outstanding membership interests of United and United agreed
to merge with United Subsidiary in a transaction whereby United would be the
surviving entity and a wholly-owned subsidiary of FMG. On the closing date,
two
of the current directors and all of the current officers of FMG will resign
and
United will appoint new officers and three new directors. Upon consumation
of the merger, FMG will change its name to United Insurance Holdings
Corp.
The
press
release announcing the execution of the Merger Agreement is attached hereto
as
Exhibit 99.1. The Merger Agreement is attached hereto as Exhibit 2.1 and should
be referred to when reading the following summary.
The
Merger Agreement provides that United will receive aggregate consideration
of
$95 million at closing, consisting of $25 million in cash and 8,750,000 shares
of FMG common stock ($8.00 per share) having an agreed on value of $70 million.
Up to $5,000,000 of additional consideration may be paid to the members of
United in the event net income of United exceeds $25,000,000 for either of
the
period of: (i) July 1, 2008 through June 30, 2009 or (ii) January 1, 2009
through December 31, 2009. There
is
approximately $38 million of cash available for investment currently held in
trust by FMG, from which the $25 million cash component of the consideration
will be available, subject to certain terms and conditions of the Merger
Agreement. FMG
will
register the issuance of the shares of its common stock to be issued in the
merger on a registration statement on Form S-4 (the “Registration
Statement”).
The
closing of the merger is subject to stockholder approval of FMG, member approval
of United, regulatory clearances, including the Florida Office of Insurance
Regulation, the Registration Statement being declared effective by the
Securities and Exchange Commission (the “SEC”), and other customary closing
conditions. In connection with the proposed transaction, FMG obtained a fairness
opinion from Piper Jaffray & Co., an unaffiliated, third party appraiser, to
the effect that the
consideration to be paid by FMG in the merger is fair, from a financial point
of
view, to the holders of FMG’s common stock.
Each
of
FMG, United and United Subsidiary has agreed to continue to operate their
respective businesses in the ordinary course prior to the closing of the merger.
Additional material covenants, include, but are not limited to, each party
protecting confidential information and maintaining the confidentiality of
the
other’s proprietary information.
United
and its subsidiaries shall obtain the written consent of FMG prior to:
(a)
amending any of their respective formation or governing documents, (b) selling
any equity interests or incurring debt; (c) increasing salary and wages by
more
than 10% , (d) changing tax, accounting, distribution or dividend policies
(unless required by GAAP), (e) transferring, licensing or otherwise amending,
modifying or permitting to lapse any material license, (f) terminating or
assigning any contract in excess of $50,000 or which is otherwise deemed a
material contract, (g) entering into any new line of business, (h) letting
lapse
insurance policies providing coverage with respect to the assets, operations
and
activities of United and its subsidiaries, or modifying any of same in an amount
and scope of coverage as are currently in effect, (i) releasing, assigning
or
settling any claim, action or proceeding in excess of $50,000 (other than in
the
ordinary course of business), (j) making any capital expenditure in excess
of
$150,000; (k) liquidating, dissolving, restructuring or consolidating their
operations, (l) merging with or acquiring any entity, (m) taking any action
which would reasonably be expected to delay or impair the obtaining of any
consents or approvals to be obtained in connection with the Merger Agreement;
(n) entering into any new reinsurance transaction as assuming or ceding insurer
which (1) does not contain market cancellation, termination and commutation
provisions or (2) adversely changes the existing reinsurance profile of United
and its subsidiaries outside of the ordinary course of business consistent
with
past practice, or (o) altering or amending in any material respect any existing
underwriting, claims handling, loss control, investment, actuarial, financial
reporting or accounting practices, guidelines or policies (including compliance
policies) or any material assumption underlying an actuarial practice or policy,
except as may be required by GAAP, applicable SAP, any governmental authority
or
applicable law. Notwithstanding the foregoing, United may declare, pay or set
aside any (i) distributions in an amount equal to its accrual for taxes as
computed consistently with past practices and presented on United’s financials
dated December 31, 2007 and (ii) distributions not to exceed $2,500,000 in
the
aggregate.
FMG
and
United Subsidiary shall obtain the written consent of United prior to:
(a)
amending any of their respective formation or governing documents, (b) selling
any equity interests or incurring debt, (c) making any change in accounting
methods, principles or practices, except as required by GAAP and approved by
FMG’s outside auditors; (d) entering into any contract committing to make
capital expenditures for any period following the Effective Time, (e) making
or
rescinding any material election relating to taxes or making any change in
its
accounting or tax policies or procedures, in each case except as required by
applicable law or GAAP, (f) entering into any agreement or contract that would
be a material contract, (g) incurring any material liability or obligation
other
than in the ordinary course of business consistent with past practice, (h)
entering into, amending or terminating (other than terminations in accordance
with their terms) any affiliate transaction, (i) entering into any new line
of
business, (j) releasing, assigning or settling any claim, action or proceeding
in excess of $50,000 (other than in the ordinary course of business), (k) making
any capital expenditure in excess of $150,000; (l) liquidating, dissolving,
restructuring or consolidating their operations, (m) merging with or acquiring
any entity or (n) taking any action which would reasonably be expected to delay
or impair the obtaining of any consents or approvals to be obtained in
connection with the Merger Agreement.
FMG
and
United have
made
customary representations and warranties and covenants in the Merger Agreement,
including among others, (a) not to solicit proposals related to alternative
business combination transactions or (b) subject to certain exceptions,
enter into discussions concerning or provide information in connection with
alternative business combination transactions. Such representations and
warranties were made as of the date of the Merger Agreement or other specific
dates, and such representations and warranties should not be relied upon by
any
other person or entity. The Merger Agreement contains certain termination rights
for both FMG and United,, including that both FMG and United may terminate
the
Merger Agreement if the closing has not occurred on or before the
date
that is the earlier of: (a) six months from the filing of the Registration
Statement or (b) November 2, 2008, provided that this termination right is
not
available to any party whose failure to fulfill any obligation under the Merger
Agreement is the primary cause of the failure of the closing to occur on or
before such date.
The
obligation of each party to consummate the merger is subject to the satisfaction
or waiver (where permissible) of the following conditions: (a) approval of
the
stockholders of FMG in accordance with Delaware law and
the
holders
of one share less than thirty percent (30%) of the shares issued in FMG’s
initial public offering do not both vote against the merger and exercise their
conversion rights, (b) receipt of all authorizations, approvals and permits
required to be obtained from or made with any governmental authority, (c) the
Registration Statement being declared effective by the SEC,
(d)
approval
of not less than 66% of the members of United, (e) less than ten percent (10%)
of the outstanding membership interests of United properly exercising and
perfecting the right to dissent from the merger and to be paid fair value for
their membership interests in accordance with the Florida Limited Liability
Company Act, and (f) the required regulatory approvals, including the Florida
Office of Insurance Regulation, not imposing a condition which would materially
adversely affect the benefits, taken as a whole, FMG reasonably expects to
derive from the transactions contemplated by the Merger Agreement. We cannot
assure you when, or if, all the conditions to completion of the merger will
be
satisfied or waived.
Assuming
the merger is consummated, FMG will no longer be a blank-check, or special
purpose acquisition corporation. If FMG does not complete the merger, it will
continue as a blank check company until it finds another suitable company to
acquire or the trust account is liquidated as part of its cessation of corporate
existence and FMG shall cease to operate as a public blank check
company.
In
the
merger agreement, United expressly waived any and all claims against the trust
fund in which the net proceeds of FMG’s initial public offering were deposited,
regardless of whether such claim arises as a result of, in connection with
or
relating in any way to, the business relationship between United, on the one
hand, and FMG, on the other hand, the merger agreement, or any other agreement
or any other matter, and regardless of whether such claim arises based on
contract, tort, equity or any other theory of legal liability. United further
waived any and all claims it may have, now or in the future, and will not seek
recourse against, the trust fund for any reason whatsoever. In the event United
commences any action or proceeding based upon, in connection with, relating
to
or arising out of any matter relating to FMG, which proceeding seeks, in whole
or in part, relief against the trust fund or the public stockholders of FMG,
whether in the form of money damages or injunctive relief, FMG shall be entitled
to recover from United the associated legal fees and costs in connection with
any such action..
The
foregoing description of the merger and the Merger Agreement does not purport
to
be complete and is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit 2.1 hereto, and is incorporated into
this report by reference. The Merger Agreement has been included to provide
investors and stockholders with information regarding its terms. It is not
intended to provide any other factual information about FMG or United. The
Merger Agreement contains representations and warranties that the parties to
the
Merger Agreement made to and solely for the benefit of each other, and the
assertions embodied in such representations and warranties are subject to
important qualifications and limitations agreed to by FMG and United in
connection with negotiating the Merger Agreement. Accordingly, investors and
stockholders should not rely on such representations and warranties as
characterizations of the actual state of facts or circumstances as of any
specified date, as they were used for the specific purpose of allocating risk
between United and FMG, rather than establishing any matters as facts.
Ellenoff
Grossman & Schole LLP acted as legal advisor to FMG. Foley &
Lardner LLP is acting as legal advisor to United on this
transaction.
Forward-looking
Statements
This
current report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, about FMG, United and their
combined business after completion of the proposed merger. Forward-looking
statements are statements that are not historical facts. Such forward-looking
statements, based upon the current beliefs and expectations of FMG’s and
United’s management, are subject to risks and uncertainties, which could cause
actual results to differ from the forward looking statements. The following
factors, among others, could cause actual results to differ from those set
forth
in the forward-looking statements: failure of FMG’s stockholders to approve the
agreement and plan of merger and the transactions contemplated thereby; the
number and percentage of FMG’s stockholders voting against the merger; continued
compliance with government regulations; legislation or regulatory requirements
or changes adversely affecting United’s business; demand for the products and
services United provides; general economic conditions; geopolitical events
and
regulatory changes, as well as other relevant risks detailed in FMG’s filings
with the SEC. The information set forth herein should be read in light of such
risks. Neither FMG nor United assumes any obligation to update the information
contained in this press release.
Additional
Information and Where to Find It
This
current report on Form 8-K does not constitute an offer of any securities for
sale. The proposed merger will be submitted to FMG’s stockholders for their
consideration. In
connection with the proposed merger and required stockholder approval, FMG
will
file with the SEC the Registration Statement, which will include a proxy
statement/prospectus and which will be mailed to the stockholders of FMG. FMG’s
stockholders are urged to read the proxy statement/prospectus and other relevant
materials when they become available as they will contain important information
about the merger. FMG stockholders will be able to obtain a free copy of such
filings at the SEC’s Internet site (http://www.sec.gov). Copies of such filings
can also be obtained, without charge, by directing a request to FMG, Four Forest
Park, Second Floor, Farmington, CT 06032.
FMG
and
its officers and directors may be deemed to have participated in the
solicitation of proxies from FMG’s stockholders in favor of the approval of the
merger and related matters. Information concerning FMG’s directors and executive
officers is set forth in the publicly filed documents of FMG, including in
its
final prospectus dated October 4, 2007..
Stockholders of FMG and other interested persons may obtain more detailed
information regarding the direct and indirect interests of FMG and its directors
and executive officers in the merger by reading the preliminary and definitive
proxy statement/prospectus regarding the merger, which will be filed with the
SEC.
Item 8.01
Other Events
FMG
today
announced it will hold
meetings with potential investors prior to the merger completion to further
discuss the transaction. If any accredited investors are interested in meeting
with management, please contact Adam Prior of The Equity Group at 212-836-9606
or aprior@equityny.com.
Investor
Presentation
The
presentation attached hereto as Exhibit 99.2 is in the form of slide show
presentation which FMG expects to use in investor presentations to describe
the
merger, assuming stockholders of FMG approve the merger and the related matters.
Statement
from Bulldog Investors
Bulldog
Investors owns FMG securities equal to 21.7% voting power, as disclosed in
Bulldog’s filing with the SEC dated March 26, 2008. On March 18, 2008, FMG
discussed its business combination criteria with Bulldog and Bulldog described
its criteria for evaluating a proposed business combination and advised FMG
that
if FMG presented a business combination meeting Bulldog’s criteria, Bulldog’s
intention is either to: (i) support the proposed business combination or (ii)
accept a bid for some or all of its holdings of FMG’s common stock.
(d)
Exhibits.
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Exhibit
No.
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Description
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2.1
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Agreement
and Plan of Merger dated April 2, 2008. (schedules
and Exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K.
FMG agrees to furnish supplementally a copy of any omitted schedule
to the
SEC upon request.)
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99.1
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Press
Release issued April 2, 2008
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99.2
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Investor
Presentation
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FMG
ACQUISITION CORP.
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Date: April
3, 2008
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By:
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/s/ Gordon
G. Pratt
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Gordon
G. Pratt
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Chairman,
President and Chief Executive
Officer
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