MMI To Nominates 4 To Brink’s (BCO) Board

MMI Investments, an 8.4% holder of Brink’s Company (NYSE: BCO), announced its four director nominees for election at the 2008 Annual Meeting.

Clay Lifflander, Portfolio Manager of MMI, said, "We are not seeking control of the board. We simply believe that the board as currently composed has demonstrated that it lacks the security industry perspective, strategic alternatives acumen and stockholder representation necessary to protect and maximize the value of Brink’s stockholders’ investment."

MMI’s nominees are:

John S. Dyson: Chairman of MCM Capital Management, LLC (the general partner of MMI Investments, L.P.) and Chairman of Millbrook Capital Management Inc.

Peter A. Michel: Mr. Michel is a recognized leader in the security services industry, and was formerly CEO of Brink’s residential security monitoring subsidiary, Brink's Home Security (BHS).

Robert J. Strang: Mr. Strang currently serves as the CEO of Investigative Management Group serving major financial institutions, Fortune 500 companies, large law firms and high net-worth individuals and families.

Carroll R. Wetzel, Jr.: Mr. Wetzel currently serves as a member of the board of directors of Exide Technologies (NASDAQ: XIDE), a manufacturer of batteries used in transportation, motive power, network power, and military applications.

MMI's Buyout Touch Continues with DJO

The buyout touch continues for MMI Investments. This morning, the firm's latest portfolio stock, DJO Incorporated (NYSE: DJO), agreed to be acquired by ReAble in a transaction valued at approximately $1.6 billion ($50.25/share).

5 of 7 of MMI's latest portflio stocks have now been acquired. The two that have not been acquired are Brink's Company (NYSE: BCO) and Unisys (NYSE: UIS). MMI has been pushing Brink's to spin-off one of its two business segments and the company is constantly a rumored takeover target. There has been no takeover news on Unisys.

MMI Investments Again Urges Brink's (BCO) To Pursue a Spin-Off

In an amended 13D filing on Brink's Company (NYSE: BCO) this morning, 8.3% holder MMI Investments disclosed a new letter to the Board of Directors presenting its views concerning the potential desirability of a spin-off of one of its two business segments.

MMI highlighted news last week that the company's competitor in security monitoring, Tyco, completed its long awaited spin-offs and, commenting on the high level of strategic activity in its industries said, "BCO has taken no action despite repeated demands from stockholders." MMI said, because of the company's non-action, "we fear that the public markets are passing BCO by."

Commenting on the potential value of Brink's in the event of a split-up, MMI said, "the aggregate value of achieving the business purposes of a tax-free split-up would be worth more than $79 per BCO share (an increase of 26% or more from today’s closing stock price), but also note that this updated analysis suggests our expectations may be unduly conservative."

NOTE: Recently we published an article highlighting MMI's 'Buyout Touch"

NOTE 2: Brink's is also an activist target of Pirate Capital, which was awarded a seat on the company's board.

A Copy of the Letter:

Dear Members of the Board,

Last week BCO’s largest competitor in security monitoring, Tyco, completed its long awaited spin-offs; in turn transforming itself into a virtual pureplay in security monitoring (with nearly 60% of its EBITDA derived from ADT and no more than 13% in any other business). The new Tyco currently trades at 10.2x calendar 2007 EBITDA (versus BCO at 6.6x). The Tyco spin follows the successful example of BCO’s largest European competitor, Securitas, which spun-off its own security monitoring business, Securitas Direct, late last year. Securitas Direct currently trades at 9.7x 2007 EBITDA. Since the Securitas Direct spin-off there have also been two major strategic acquisitions in the security monitoring space (HSM Electronic and IASG) and one in cash-in-transit (ATI), all at robust valuations.

In contrast to this high level of strategic activity in its industries, BCO has taken no action despite repeated demands from stockholders. More than six months have passed since MMI presented the Board with its review of BCO’s strategic alternatives to enhance stockholder value, and more than three months have passed since MMI refined that review to recommend a tax-free split-up of BCO as the best option. Our concerns now extend beyond maximizing BCO’s value – we fear that the public markets are passing BCO by, to the potential detriment of all its stakeholders.

For the Board’s benefit, we have enclosed herein updated analysis of a split-up of BCO’s two subsidiaries, which includes an expanded comparable public company universe at more robust multiples than in our March 30, 2007 presentation. We continue to believe that the aggregate value of achieving the business purposes of a tax-free split-up would be worth more than $79 per BCO share (an increase of 26% or more from today’s closing stock price), but also note that this updated analysis suggests our expectations may be unduly conservative. As always, we are at your disposal to discuss the enclosed analysis.

Sincerely,
Clay Lifflander

The Buyout Touch

You've heard of Genesis' song Invisible Touch, but have you heard of the Buyout Touch?

Here's how the song goes:

"MMI Investments seems to have a buyout touch - yeah. They take a stake, and you should take it to heart.

MMI Investments seems to have a buyout touch - yeah. They take control before a buyer looks to tear it apart."


Looking at MMI Investments' recent holding many have been acquired or are in the process of being acquired. These are not arbitrage plays, MMI owned the positions before the deals were announced.

Here is their current portfolio as of May 31, 2007.

Acxiom Corp (Nasdaq: ACXM): In May, the company agreed to be acquired by Silver Lake and ValueAct Capital for $27.10 per share. MMI Investments said they plan to vote against the deal, calling it too cheap.

Brinks Co (NYSE: BCO): The company is said to be considering strategic alternatives. MMI has pushed for a sale or other strategic alternatives. Another activist investor, Pirate Capital, which was also pushing for a sale, had its founder Tom Hudson added to Brink's board.

Dendrite Intl (Nasdaq: DRTE): Recently closed a transaction in which French company, Cegedim SA, acquired the company for $16 per share in cash.

Paxar (NYSE: PXR) Avery Dennison (NYSE: AVY) will acquire the company for $30.50 per share in a cash.

Unisys (NYSE: UIS): No merger deal or discussions. (YET!)

In the recent past, MMI also owned Andrx (Nasdaq: ADRX) which was acquired by Watson Pharmaceuticals (NYSE: WPI) for $25 per share.

MMI is run by Clay Lifflander. Prior to joining MMI, Lifflander served as President of the NYC Economic Development Corp under Mayor Rudolph Giuiliani and prior to that was Managing Director in the M&A Group at Smith Barney.