Luther King Capital's offer for Industrial Distribution could be superior to offer from Platinum Equity

By Lisa Kerner

Charlotte, N.C., April 7 - Luther King Capital Management Corp. said its affiliated investment partnership, LKCM Private Discipline Master Fund, SPC, made an $11.70-per-share offer for Industrial Distribution Group, Inc.

The offer price is a 13.6% premium to the $10.30-per-share cash offer from Platinum Equity Advisors, LLC and its affiliates that Industrial Distribution previously accepted, a Luther King Capital news release said.

Luther King Capital, a 14.9% beneficial shareholder, outlined its proposal in an April 4 letter to Industrial Distribution chairman Richard M. Seigel that was included in the release.

The proposal is not subject to a financing condition, and Luther King Capital said it is willing to execute a definitive agreement in "substantially the same form" as Industrial Distribution's agreement with Platinum Equity.

Industrial Distribution stock (Nasdaq: IDGR) closed at $10.24 on April 4.

"We are enthusiastic about a transaction with [Industrial Distribution] and believe that our proposal will enable the board of directors to maximize value for [Industrial Distribution] stockholders," Luther King Capital's letter stated.

On Feb. 21 it was announced that Flexible Procurement Solutions, an affiliate of Platinum Equity, agreed to acquire Industrial Distribution for $10.30 cash per share.

Total value of the transaction is $113 million, including the acquisition of all of Industrial Distribution's outstanding shares and options for $102.9 million, plus the assumption of all Industrial Distribution debt, it was previously reported.

The definitive merger agreement includes a termination fee of 3% of the merger consideration, or $3.39 million, it was reported in an 8-K filing with the Securities and Exchange Commission.

In July 2007, Industrial Distribution formed a special committee to conduct a strategic review with the assistance of Robert W. Baird & Co. Baird provided a fairness opinion to the committee in the proposed merger with Flexible Procurement Solutions.

Atlanta-based Industrial Distribution supplies maintenance, repair, operating and production products and services in the United States and China.

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