Shareholder Sues NCI Over Seemingly Shady Acquisition Proposal

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NCI Inc. and members of its board of directors have been named as defendants in a proposed class action lawsuit that claims they withheld material information from shareholders in their recommendation of a proposed acquisition of the company by H.I.G. Capital, LLC. The plaintiff claims H.I.G.’s offer of $20.00 per share of NCI’s common stock “severely undervalues” the company, noting that it amounts to even less than the trading price of NCI stock at the time of the transaction’s announcement. According to the complaint, “Since NCI is not in severe financial distress, it does not follow logically that NCI would accept an offer for less than their current trading price.”

The plaintiff demands that the defendants release information concerning the details of the company’s financial projections and the valuation analyses performed by its financial advisor, along with any potential conflicts of interest. From the complaint:

“A reasonable shareholder would want to know what important economic motivations that the advisor, employed by a board to assess the fairness of the deal to the shareholders, might have. This is especially true when that motivation could rationally lead the advisor to favor a deal at a less than optimal price, because the procession of a deal was more important to them, given their overall economic interest, than only approving a deal at truly fair price to shareholders.”