Media Arts Group, Inc. (NYSE: MDA) and Thomas Kinkade have
signed a definitive agreement to take Media Arts Group private. The
move, made Oct. 31, is made possible by a merger of a Kinkade
affiliate with the company.
Media Arts Group, Inc. (NYSE: MDA) and Thomas Kinkade have signed a definitive agreement to take Media Arts Group private. The move, made Oct. 31, is made possible by a merger of a Kinkade affiliate with the company.
The Morgan Hill-based Media Arts Group is a leading designer, manufacturer, marketer and branded retailer of fine-art reproductions, art-based home decorative accessories, collectibles and gift products based upon artwork by Kinkade.
Manufacturing and assembly of Kinkade lithograph prints is done at the facility.
Media Arts distributes Kinkade’s art and related collectibles through approximately 4,500 independently owned galleries worldwide, an extensive network of Thomas Kinkade brand retailers, and strategic marketing relationships with companies such as Avon Products, Inc. and QVC Inc.
The company’s primary products are canvas and paper lithographs that feature Kinkade’s unique use of light and his peaceful and inspiring themes. Kinkade, known as the “Painter of Light,” is the most commercially successful and reported to be the most collected living artist in U.S. history.
Although Kindkade is its primary artist, Media Arts also manufactures and markets the work of other artists, such as Howard Behrens, Simon Bull and Robert Lyn Nelson.
Last touches on the Media Arts manufacturing warehouse are in progress.As a result of the merger, the holders of Media Arts Group’s outstanding common stock (other than Kinkade and his affiliates) will receive $4 per share in cash for their shares, and Media Arts Group will become a privately held company, wholly owned by Kinkade and affiliates. The per-share consideration places the total enterprise value of Media Arts Group at approximately $32.7 million and represents an approximately 69 percent premium over the $2.37 per share price of the stock on Oct. 30.
The transaction was unanimously approved by the Media Arts Group board of directors acting without the participation of Kinkade and two other non-independent directors. Jefferies & Company, Inc. acted as financial adviser and rendered a fairness opinion to the independent directors.
It is expected that funds necessary to purchase the outstanding shares of Media Arts Group will be funded through borrowings and cash on hand of Media Arts Group. A commitment letter has been received from GE Corporate Financial Services, Inc. for the financing, subject to the execution of definitive loan documents and the fulfillment of the conditions therein to the satisfaction of GE Corporate Financial Services, Inc. Such financing is currently expected to consist of a $25 million senior secured credit facility (currently expected to consist of a $3 million term loan and a $22 million revolving credit loan).
It is anticipated that the transaction will close in December 2003 or January 2004, with the exact timing dependent on the completion of necessary SEC filings and regulatory approval. The merger is conditioned upon the receipt of financing, regulatory approval, the approval by the holders of at least a majority of the shares of Media Arts Group common stock not owned by Kinkade or his affiliates that are cast either for or against the merger, as well as other customary conditions.
Media Arts is headquartered in Morgan Hill at 900 Lightpost Way in the Madrone Business Park north of Cochrane Road.
