NEW YORK, Feb. 17, 2012 (GLOBE NEWSWIRE) -- Moab Capital Partners, LLC ("Moab Capital") today announced that it has given notice to Mac-Gray Corporation ("Mac-Gray" or the "Company") (NYSE:TUC) that it will be nominating two independent candidates for election to Mac-Gray's Board of Directors at the 2012 Annual Meeting of Stockholders. Moab Capital is the investment manager of Moab Partners, L.P. ("Moab Partners"), an investment fund that beneficially owns 8.3% of Mac-Gray's outstanding shares. Moab Capital's nominees are Jonathan G. Davis and Bruce A. Percelay.
Moab Capital has been a constructive Mac-Gray stockholder for nearly two years. However, upon reading in the Company's press release of October 24, 2011 that its Board of Directors unanimously rejected a proposal from KP Capital, LLC ("KP Capital") to acquire Mac-Gray for $17.50 in cash per share, we were dumbfounded.
This news came concurrently with a decision by the Board of Directors to not explore any strategic alternatives, not commence a share buyback with the stock trading 25% below KP Capital's takeover price, and not increase the dividend being paid to stockholders. Furthermore, the Board has not shown any evidence that questions the credibility of the KP Capital proposal, nor has it provided any business plan for the Company which justifies value to all stockholders in excess of $17.50 per share. The Board's failures to disclose this and other material information to the stockholders have come despite Moab Capital's repeated written requests for such public disclosure.
KP Capital's Managing Member is Benjamin Kovler, a stockholder who has criticized Mac-Gray's management on numerous occasions over the past few years and ran a proxy fight against three incumbent directors last year. We believe this history has complicated Mr. Kovler's efforts to explore with the Board a possible transaction that would create value for us, the stockholders of the Company. For example, following KP Capital's offer of $17.50 per share, as far as Moab is aware, the Company's Board of Directors neither offered KP Capital the opportunity to meet with the entire Board nor the opportunity to enter into a negotiation to determine whether KP Capital might be prepared to pay even more. We desire a board unencumbered by personal issues and believe our nominees can bring a fresh perspective. We believe it's time for a change.
Moab Capital's two nominees are seasoned executives who we believe, if elected, will help maximize value for all stockholders. Both nominees have significant operational, financial and strategic experience with Mac-Gray's core customer base - large apartment building owners. In addition, both Mr. Davis and Mr. Percelay bring many years of financial valuation, acquisition and divestiture experience, skills we believe are sorely lacking on Mac-Gray's current Board of Directors. Lastly, both nominees run businesses and live close to Mac-Gray's corporate offices, so they can be highly accessible and present at Mac-Gray Board meetings.
We believe that Messrs. Davis and Percelay would provide the Board with a breadth and depth of experience that is far more valuable and relevant to the business of Mac-Gray than that of Bruce Ginsberg and Paul Daoust, Class III Directors whose present terms expire upon the 2012 annual meeting.
Moab Capital is taking on this task, the third proxy fight against the Company since 2009, on behalf of all stockholders who believe the Board's actions in connection with KP Capital's offer and its aftermath have been wholly inadequate and would like to bring a new perspective to the Board. Moab Capital has determined on this course of action itself, and not in conjunction with any other stockholder.
We note that following two letters from Moab Capital to the Board, the Board announced two initiatives that are directionally appropriate but are unfortunately immaterial, even when considered in aggregate. First, the Board authorized a $2 million share repurchase program, which represents just 1% of the current fully diluted market capitalization of the Company. This insignificant repurchase authorization did not even come with a commitment or a timeline of when shares may actually be repurchased. Second, the Board announced an increase of the Company's regular quarterly dividend by approximately one-half of one penny per share – an incremental commitment of approximately $300,000 per year to the shareholders. Moab Capital would prefer, and believes that other independent shareholders would prefer, a Board that delivered $17.50 of cash for their shares than one that adopts what we view as insignificant initiatives.
Nominees
Jonathan G. Davis (age 59): Since 1975 Mr. Davis has been Chief Executive Officer of The Davis Companies, a real estate investment and development firm that owns and manages a portfolio of approximately six million square feet of various types of real estate. Mr. Davis has had a long and distinguished career in real estate investment, during which he has been involved in investments in real estate projects totaling over $2 billion. He was chosen by Ernst and Young as the New England Entrepreneur of the Year in the Real Estate category in 2000. Mr. Davis is Vice Chairman of the Board of Trustees of Brandeis University and the Chair of the Board of Directors of the Boys and Girls Clubs of Boston. In addition, Mr. Davis has been both President (2008) and Board Chair (2009) of the Massachusetts Chapter of the National Association of Industrial and Office Properties.
Bruce A. Percelay (age 57): Since 1985 Mr. Percelay has served as Chairman of The Mount Vernon Company, a Boston based real estate and development firm that owns approximately 1,400 apartments in the greater Boston, Massachusetts and Providence, Rhode Island markets. Under Mr. Percelay's leadership The Mount Vernon Company firm has won national and local awards for its service, including the Paragon Award (in the category of Best Mid/High Rise Community Pre 1979 - Under 150 Units) from the National Apartment Association in 2008 and "Best Landlord in Boston" from Boston Magazine in 2000. Mr. Percelay has been involved in numerous real estate acquisitions. Mr. Percelay currently sits on the board of Tufts New England Medical Center. Mr. Percelay served as Chairman of Habitat for Humanity of Greater Boston from 2000 to 2007 and as Executive Vice President of the Nantucket Historical Association from 2002 to 2008.
About Moab Capital Partners, LLC
Moab Capital is an SEC-registered independent investment advisor founded in 2006 and is located in New York, NY.
Additional Information
MOAB CAPITAL PARTNERS, LLC ("MOAB CAPITAL") WILL FILE A PROXY STATEMENT REGARDING THE ELECTION OF DIRECTORS OF MAC-GRAY CORPORATION (THE "COMPANY") AT THE COMPANY'S 2012 ANNUAL MEETING OF STOCKHOLDERS. SECURITY HOLDERS ARE ADVISED TO READ THIS PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY MOAB PARTNERS, L.P. FROM THE STOCKHOLDERS OF MAC-GRAY CORPORATION FOR USE AT ITS 2012 ANNUAL MEETING WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, THIS DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE AVAILABLE TO STOCKHOLDERS OF MAC-GRAY CORPORATION AT NO CHARGE FROM THE PARTICIPANTS AND AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT WWW.SEC.GOV.
THE FOLLOWING MAY BE DEEMED, UNDER SEC RULES, TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM THE COMPANY'S STOCKHOLDERS IN CONNECTION WITH THE UPCOMING ELECTION OF THE COMPANY'S BOARD OF DIRECTORS: (I) MOAB CAPITAL, (II) THE OFFICERS AND MANAGEMENT OF MOAB CAPITAL, INCLUDING MICHAEL ROTHENBERG AND DAVID SACKLER, (III) MOAB PARTNERS, L.P. AND (IV) MESSRS. JONATHAN DAVIS AND BRUCE PERCELAY, THE INDIVIDUALS NOMINATED BY MOAB CAPITAL FOR DIRECTOR. INFORMATION REGARDING THE PARTICIPANTS AND THE INTERESTS OF MOAB CAPITAL AND ITS AFFILIATES THAT ALSO OWN SHARES OF THE COMPANY MAY BE FOUND IN FILINGS BY MOAB CAPITAL WITH THE SEC ON SCHEDULE 13D, AS AMENDED, WHICH INCLUDES A COPY OF THE NOTICE OF NOMINATION AND PROVIDES DETAILED INFORMATION ABOUT THE PARTICIPANTS.