SKILLMAN, N.J., Oct. 9, 2012 /PRNewswire/ -- Matrixx Initiatives, Inc., the maker of the Zicam® cold, sinus and allergy line of products, today announced that it has filed a presentation with the Securities and Exchange Commission ("SEC") in connection with its revised offer to acquire ProPhase Labs, Inc. (NASDAQ: PRPH). Separately today, Matrixx announced it has increased its offer to acquire all of the outstanding shares of ProPhase by 14.3% to $1.60 per share, and has sent a letter to the ProPhase Board of Directors.
Matrixx believes that its revised all-cash offer, which is not contingent on financing, is highly attractive to ProPhase shareholders, as it provides them with compelling upfront and certain value relative to a difficult, uncertain and highly speculative multi-year turnaround program recently outlined by ProPhase's management. Matrixx's presentation outlines the significant challenges ProPhase faces by remaining a standalone entity, including:
ProPhase is in a Vulnerable Market Position
- ProPhase lacks scale to effectively compete in the highly competitive Cough Shortening / Immune Boosting market.
- ProPhase's most comparable competitors generate 3.5x more in annual revenue and are backed by owners with substantial resources.
ProPhase has an Unsustainable Financial Model
- ProPhase continues to experience substantial losses due to its financial model.
- Greater than 80% of ProPhase's net sales are spent on operating expenses.
- Cumulative losses from operations since 2009 amount to $12.9 million. ProPhase's stock price has declined 73.6% since June 2009, when current management assumed it role.
ProPhase has Placed Shareholders in a Tenuous Position
- ProPhase has received a Non-Compliance notice from NASDAQ for failing to meet the minimum shareholders' equity requirement for continued listing on the Global Market.
- ProPhase received a notice of de-listing as recently as July 2011.
- The lack of analyst coverage limits any ongoing interest from the investor community.
The presentation is being filed with the SEC and will be available at www.sec.gov.
Kirkland & Ellis LLP is acting as legal counsel and Sawaya Segalas & Co., LLC is acting as financial advisor to Matrixx.This press release and Matrixx's proposal constitute a preliminary non-binding indication of interest to acquire all of the outstanding shares of ProPhase Labs, Inc., and are not intended to create any legally binding obligations.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV