Database provider Infogroup sets shareholder vote on proposed $460 million sale of business

Thursday, May 27, 2010

Infogroup sets vote on proposed sale for June 29

OMAHA, Neb. — Database provider Infogroup Inc. said Thursday it has set a shareholder vote for June 29 on the company’s proposed $460 million sale to private equity firm CCMP Capital Advisors.

Two investment firms that together hold about 11 percent of Infogroup’s stock — Hotchkis and Wiley Capital Management and Stonerise Capital Partners — have objected to the deal as underpriced and ill-timed. But Infogroup founder Vinod Gupta controls more than 35 percent of the stock, and he supports the deal.

New York-based CCMP is offering $8 per share for Infogroup, and the board of the Omaha-based company has unanimously recommended that shareholders accept it. The deal also includes refinancing about $175 million of Infogroup’s debt. The shares were trading around $7.93 on Thursday.

Both Hotchkis and Wiley and Stonerise have sent letters to Infogroup’s board objecting to the terms.

Los Angeles-based Hotchkis and Wiley is Infogroup’s second-largest shareholder. Since the deal was announced in March, the firm has bought more Infogroup stock and now controls about 8.5 percent of the company. San Francisco-based Stonerise Capital owns about 2.5 percent of the Omaha-based company’s stock.

Gupta was the chief executive and chairman of the company, which used to be known as InfoUSA, from 1992 through August 2008. He lost those positions in 2008 after a shareholder lawsuit raised questions about his spending.

The lawsuit alleged that Infogroup misspent millions of dollars, some of it on domestic and international air travel for former President Bill Clinton and his wife, then-Sen. Hillary Rodham Clinton.

Gupta pledged to reimburse InfoGroup $9 million over five years as part of the lawsuit settlement announced in August 2008, but he remained on the company’s board and received $10 million severance. Gupta resigned from Infogroup’s board right after voting to recommend the CCMP deal, and he agreed in March to pay more than $7.3 million to settle an SEC investigation into the way he used more than $9 million of Infogroup’s money to support an extravagant lifestyle.


InfoGroup Inc.:

CCMP Capital Advisors LLC:

Stonerise Capital Partners:

Hotchkis and Wiley Capital Management:

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