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PEO provider Fortune Industries Inc. (NYSE MKT: FFI) will exit the PEO business and instead become an operator of skilled nursing facilities under proposed merger plans, according to filings with the U.S. Securities and Exchange Commission.
The deal calls for Fortune to acquire Ide Management Group LLC, an operator of 20 skilled nursing facilities in four Midwestern states. Ide’s owner, Mark Ide, will receive a majority of shares in Fortune Industries in the deal. Ide deposited $300,000 in an escrow account to see the deal through.
Fortune would remain a public company with the Ide acquisition, and there would be no buyout of current shareholders.
However, Fortune’s PEO operations would go to CEP Inc. in exchange for preferred shares and common shares of Fortune owned by Fortune’s late chairman and CEP. Fortune Industries will no longer have preferred shares after the deal.
CEP is majority owned by Fortune CEO Tena Mayberry and CFO Randy Butler. CEP earlier this year began pursuing a deal to acquire Fortune Industries under different terms.
Carter Fortune, chairman of Fortune Industries, died in August. He was a majority shareholder, according to the firm’s last 10-K report.