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Hirsch International signs merger agreement to be acquired by CEO

04
Jul '09
Hirsch International Corp. announced that it has entered into a definitive merger agreement to be acquired by its President, Chief Executive Officer and Chief Operating Officer, Paul Gallagher, for $0.31 per share in cash. Mr. Gallagher beneficially owns approximately 13.7% of the Company's outstanding shares of Class A Common Stock.

Under the terms of the merger agreement, the Company's stockholders, other than Mr. Gallagher and certain related parties, will receive $0.31 per share in cash for each share of the Company's common stock they hold, representing a premium of approximately 47.6% over the Company's closing share price of $0.21 on June 12, 2009, the last completed trading day prior to the public announcement of Mr. Gallagher's offer to acquire all of the Company's outstanding shares.

The Company's Board of Directors, acting upon the unanimous recommendation of a special committee comprised entirely of independent directors (the “Special Committee”), has approved the merger agreement and resolved to recommend that the Company's stockholders adopt the agreement.

Mr. Gallagher has received a financing commitment from Keltic Financial Services LLC with respect to the debt financing for the acquisition.

Under the terms of the merger agreement, the Company (acting under the direction of the Special Committee) may solicit acquisition proposals from third parties for 20 days following the signing of the merger agreement. The Special Committee, with the assistance of its independent advisors, intends to solicit acquisition proposals during this period.

There can be no assurances that the solicitation of acquisition proposals will result in an alternative transaction. The Company does not intend to disclose developments with respect to this solicitation process unless and until the Special Committee has made a decision with respect to the alternative proposals it receives, if any.

The transaction is expected to be completed in approximately three months and is subject to Mr. Gallagher's receipt of the debt financing, the approval of the merger agreement by a majority of the outstanding shares of the Company's Class A and Class B Common Stock, receipt of consent to the merger from a significant supplier, as well as other customary closing conditions.

Thompson & Hine LLP is serving as the legal advisor to the Special Committee, and Burnham Securities Inc. is serving as the financial advisor to the Special Committee and rendered a fairness opinion in connection with the proposed transaction. Bryan Cave LLP is serving as the Company's legal advisor. Baker & McKenzie LLP is acting as legal advisor to the acquiror in this transaction.

Hirsch International Corp.


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