Duff & Phelps Provided a Fairness Opinion to The Challenge Mfg. Company Employee Stock Ownership Plan
On December 9, 2011, the Challenge Mfg. Company Employee Stock Ownership Plan (the “ESOP”) purchased 5,371 shares of common stock of Challenge Mfg. Company (the “Company” or “Challenge”) from certain members of the management team for $15.8 million in aggregate, or $2,935 per share.
Role of Duff & Phelps
Duff & Phelps was engaged by Reliance Trust Company, as trustee (“Trustee”) of the Challenge Mfg. Company Employee Stock Ownership Plan to serve as independent financial advisor to the Trustee and issued a fairness opinion in connection with the transaction. The fairness opinion addressed whether the $2,935 per share paid in the transaction for shares of Challenge common stock, which represented approximately 14.5% of the total shares of the Company’s outstanding common stock, was not greater than fair market value and whether the terms and conditions of the transaction were fair and reasonable to the ESOP from a financial point of view. Duff & Phelps’ ESOP / ERISA practice, led by Elyse Bluth, John Miscione and John O’Brien, advised on the transaction with support from Jon Melzer, Duff & Phelps’ automotive industry lead. David Pardys of Reed Smith LLP acted as legal advisor for Challenge and Steve Schaffer of Brian Cave LLP acted as legal advisor for Reliance Trust Company.
About Challenge Mfg. Company
Founded in 1981, Challenge Mfg. Company is a leading manufacturer of metal stampings, automotive forgings and assemblies for the automotive industry and is a critical supplier to its largest customer, General Motors. The Company is headquartered in Grand Rapids, Michigan with three modern plants located in Walker, Michigan and one state-of-the-art facility located in Holland, Michigan.