Indianapolis-based Fortune Industries Inc. plans to remain a professional employer organization after a proposed sale of the company fell through.
According to a Jan. 3 public filing, Fortune Industries terminated its purchase agreement with skilled-nursing operator Ide Management Group LLC of Greenfield.
Fortune Industries had planned to exit the PEO business in favor of becoming a skilled-nursing operator following the death of its founder, Carter Fortune, in late August.
Under the unusual proposal, Fortune Industries would have remained a public company and abandoned its previous plan to be taken private.
The restructuring hinged on shareholder approval of a merger agreement with Ide that would have given Ide Management CEO Mark Ide shares in Fortune Industries. Founded by Ide in 1997, IMG owns or manages 20 skilled-nursing facilities in Indiana, Illinois, Iowa and Wisconsin.
The filing didn’t provide a reason as to why negotiations broke down. Fortune Industries’ lawyer said an agreement simply couldn’t be reached.
Fortune Industries now plans to pursue a sale to CEP Inc., a holding company led by Fortune Industries CEO Tena Mayberry and Chief Financial Officer Randy Butler, which it had considered before the Ide proposal.
The planned management-led buyout, which would have resulted in the business going private, valued the company at $30.5 million. If the sale is completed, the company will follow the original plan and go private.
Mayberry and Butler plan to acquire company shares from Carter Fortune’s estate and use them to buy out Fortune Industries’ PEO subsidiaries, which would operate within CEP.
CEP would be privately held and based in Nashville, Tenn. Both Mayberry and Butler would no longer be a part of Fortune Industries.
Shares of the thinly traded company traded at 18 cents each Friday morning.