CDI Facing Securities Lawsuit Over Proposed Merger with AE Industrial Partners

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CDI Corp. and its board of directors are on the receiving end of a proposed class action lawsuit filed in August that claims they omitted material information from a recommendation statement issued in connection with a potential merger between CDI and AE Industrial Partners, LLC. The plaintiff, a CDI stockholder, claims the defendants failed to include in their statement the details of non-disclosure agreements signed by other potential buyers, such as whether they were prohibited from submitting superior offers for the company.

The suit further argues that CDI’s financial projections and the valuation analyses performed by its financial advisor were missing “key inputs and assumptions” that would allow stockholders to determine for themselves whether the deal was fair.

Additionally, the suit claims the defendants failed to disclose information concerning potential conflicts of interest among the individual board members. In particular, the complaint notes that one of the board members is also a senior partner at the law firm that was engaged to advise the company in the transaction, but the recommendation statement allegedly failed to specify how the firm was chosen, the compensation it stood to receive, and whether the board member himself provided legal advice.

“Based on the foregoing,” the complaint argues, “CDI public shareholders lack critical information necessary to evaluate whether the Proposed Transaction truly maximizes shareholder value and serves their interests.”