Insight Equity Holdings Buys Flanders

Middle-market buyout shop Insight Equity Holdings is buying Flanders Corp. in a deal valued at roughly $192 million. Flanders Corp. is a manufacturer of air filters, air handling and containment systems. Under the terms of the deal, Flanders’ shareholders will receive $4.40 per share in cash, representing a premium of 39% over the average closing share price during the last 30 days.


Flanders Corporation (otcqx:FLDR), one of the largest manufacturers of air filters, air handling and containment systems, and related products in North America, today announced that it has entered into a definitive agreement to be acquired by an affiliate of Insight Equity Holdings LLC (Insight Equity), a middle-market private equity firm, in a transaction valued at approximately $192 million excluding fees and expenses.


Under the terms of the agreement, upon consummation of the transaction Flanders’ shareholders will receive $4.40 per share in cash for each share of Flanders’ common stock, representing a premium of 39 percent over the average closing share price of $3.17 during the last 30 days ending March 16, 2012 and a 42 percent premium over Flanders’ average closing share price of $3.10 during the last 90 days ending March 16, 2012.


Flanders’ board of directors unanimously approved the transaction and will recommend that Flanders’ shareholders adopt the agreement. In addition, certain Flanders’ shareholders, including some members of senior management have executed agreements to vote their shares in favor of the transaction.


Harry Smith, CEO and chairman of the board of directors of Flanders, said, “I am very pleased with the accomplishments that our leadership team and employees have made over the last several years creating a strong market presence with leading brands and unwavering customer commitment. This transaction allows all of our shareholders to realize the value created.”


Brad Buser, a Vice President of Insight Equity, said, “We are excited to invest behind this talented management team in pursuit of Flanders’ vision for continued product and service innovations in key markets.”


The transaction is subject to shareholder approval and other customary closing conditions and is targeted to close in the second quarter of 2012.


Oppenheimer & Co. Inc. is acting as Flanders’ exclusive financial advisor. McGuireWoods LLP serves as special counsel to Flanders’ board in connection with this transaction. Johnson, Pope, Bokor, Ruppel & Burns, LLP serves as Flanders’ general corporate counsel. Hunton & Williams LLP is acting as legal advisor to Insight Equity and its affiliates.


PNC Bank, National Association, member of The PNC Financial Services Group, Inc., has committed to provide a senior revolving credit facility in support of the transaction. FS Investment Corporation (which is advised by FB Income Advisor, LLC and sub-advised by GSO / Blackstone Debt Funds Management LLC) has committed to provide unitranche and mezzanine debt financing and equity financing in support of the transaction.


About Insight Equity


Insight Equity ( ) makes controlling investments in strategically viable, middle market, asset intensive companies across a wide range of industries. Insight Equity specializes in partnering with companies in complex and challenging situations, including corporate divestitures, bankruptcies, restructurings, and private family ownership. The firm leverages a proven, collaborative value creation model to facilitate operating enhancements and growth.


About Flanders


Flanders is a leading air filtration products manufacturer. Flanders’ products are utilized by many industries, including those associated with commercial and residential heating, ventilation and air conditioning systems, semiconductor manufacturing, ultra-pure materials, biotechnology, pharmaceuticals, synthetics, nuclear power and nuclear materials processing. For further information on Flanders and its products, visit its web site at or contact John Oakley at 252-946-8081.


Additional Information and Where to Find It


At the closing of the transaction, Air Acquisition Inc., an affiliate of Insight Equity, will merge with and into Flanders Corporation (the “Company”), with the Company surviving as a wholly-owned subsidiary of Air Acquisition Holdings LLC, another affiliate of Insight Equity. The closing is subject to the approval of the Company’s shareholders. In connection with the merger, the Company plans to solicit proxies from its shareholders and furnish them with a proxy statement. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND RELATED MATTERS. Shareholders will be able to obtain free copies of the proxy statement and other documents at the Company’s website at by clicking on the link “Merger Documents” and from the Company by contacting John C. Oakley, by mail at 531 Flanders Filters Road, Washington, North Carolina 27889, or by telephone at (252) 945-8081.


Participants in the Solicitation


The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in connection with the proposed merger. Information regarding the interests of these directors and executive officers in the transaction described herein will be included in the proxy statement described above. Additional information regarding these directors and executive officers is also included in the Company’s proxy statement for its 2011 Annual Meeting of Shareholders. This document is available free of charge at the Company’s website at by clicking on the link “Merger Documents” and from the Company by contacting John C. Oakley, by mail at 531 Flanders Filters Road, Washington, North Carolina 27889, or by telephone at (252) 945-8081.


Note on Forward-Looking Statements


This document contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to, statements regarding the expected benefits and costs of the transaction, the plans, strategies and objectives of management for future operations, and the expected closing of the proposed merger. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated, such as the risk of satisfying conditions precedent to the consummation of the proposed merger, including obtaining antitrust approvals in the U.S., the risk that the contemplated merger does not occur, the risk that key employees of the Company will not be retained, the risk associated with the expenses of the proposed merger and other risks. The Company assumes no obligation to update any forward-looking statement contained in this document.