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TheStreet Open House

Acquisition Of National Financial Partners Corp. By Madison Dearborn Partners, LLC May Not Be In The Best Interests Of NFP Shareholders

Stock quotes in this article: NFP

SAN DIEGO and NEW YORK, April 17, 2013 /PRNewswire/ --  Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of National Financial Partners Corp. (NYSE: NFP) by Madison Dearborn Partners, LLC, a private equity investment firm.  On April 15, 2013, NFP announced the signing of a definitive merger agreement whereby NFP shareholders will receive $25.35 in cash for each share of NFP stock.

(Logo:  http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

The Board of Director's Actions May Prevent NFP Shareholders from Receiving Maximum Value for Their Stock

Robbins Arroyo LLP's investigation focuses on whether the board of directors at NFP is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger or whether they are seeking to benefit themselves.  The $25.35 merger consideration represents a premium of only 8.29% based on NFP's closing price on April 12, 2013, the last trading day prior to the merger announcement.  Further, the $25.35 consideration represents a premium of only 11.84% to NFP's average stock price for the month prior to the announcement, which is substantially below the average premium of 31.15% for comparable transactions over the past three years.   

Is the Acquisition Best for NFP and Its Shareholders?

On February 14, 2013, NFP released its 2012 earnings reflecting strong performance in all of the company's business segments.  Specifically, the company reported that its revenue increased to $1.062 billion in 2012, compared to $1.013 billion for 2011.  Further, NFP's adjusted EBITDA in 2012 increased 11.5% to $141.0 million, compared to $126.4 million for 2011.  Moreover, NFP has exceeded analysts' earnings per share and net income expectations in the seven previous quarters.

Given these facts, the firm is examining the board of directors' decision to sell NFP now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.   

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