EXHIBIT 99.2
AFFILIATES OF BERKSHIRE PARTNERS AND BLUM CAPITAL PARTNERS TO PURCHASE
PRG-SCHULTZ SHARES FROM DIRECTORS HOWARD SCHULTZ AND ANDREW
SCHULTZ AND THEIR AFFILIATES
ATLANTA, Aug 19, 2002 /PRNewswire-/PRNewswire-FirstCall via COMTEX/ --
HOWARD SCHULTZ TO RETIRE AS CHAIRMAN BUT REMAIN DIRECTOR; CEO JOHN COOK TO BE
NAMED CHAIRMAN; COO MARK PERLBERG PROMOTED TO PRESIDENT
PRG-Schultz International, Inc. (Nasdaq: PRGX) ('the Company') announced today
that Howard Schultz, chairman, Andrew Schultz, executive vice president and
director, and certain of their affiliates (collectively referred to herein as
'the Schultz holders'), have entered into agreements to sell approximately $75.7
million, or approximately 8.68 million shares, of PRG-Schultz common stock to
certain affiliates of Berkshire Partners LLC ('Berkshire') and Blum Capital
Partners LP ('Blum'), in private transactions. Berkshire and Blum will each
purchase approximately $37.8 million, or approximately 4.34 million shares, of
PRG-Schultz common stock. Both investment firms are currently represented on the
Company's board of directors.
Each of Berkshire and Blum have also agreed to lend to certain Schultz holders
in the aggregate $25 million, and have entered into put and call arrangements to
purchase additional shares from the Schultz holders to the extent that the
Company does not exercise its options to purchase such shares as described
below.
The Schultz holders have agreed to grant the Company two options to purchase in
total approximately $25.2 million of PRG-Schultz common stock, or approximately
2.89 million shares, at a price of $8.72 per share plus accretion at 8% per
annum. One of these options, pertaining to approximately 1.45 million shares
expires in approximately six months with the second option for an additional
1.45 million shares expiring in approximately nine months.
"I am delighted that two successful investment firms of the caliber of Berkshire
Partners and Blum Capital Partners have the confidence in PRG-Schultz to make
the substantial investments that they have," said John Cook, chief executive
officer of PRG-Schultz. "Both firms have provided valuable contributions and
insights through their representation on our board, and I look forward to our
continued partnership."
Garth Greimann, managing director, Berkshire Partners, and director of
PRG-Schultz, commented, "Berkshire Partners believes strongly in PRG-Schultz's
business model and its leadership position in the industry."
Colin Lind, managing partner, Blum Capital Partners, and director of
PRG-Schultz, added, "Blum Capital Partners supports the experienced management
team of PRG-Schultz. We have increased our stake in the Company because we have
a long-term commitment to its success."
The sale transactions, expected to close before the end of August, are subject
to regulatory approval.
Upon its purchase of the approximately 4.34 million shares, Blum is expected to
beneficially own approximately 20.3% of the outstanding common stock of
PRG-Schultz, including approximately 5.17 million shares which would be issued
to Blum upon their conversion of $40 million of convertible notes. Any shares
owned by Blum or its affiliates in excess of 15% of PRG-Schultz's outstanding
shares will be voted as recommended by the Company's board of directors. The
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Company's board of directors has also approved a one-time and limited exemption
to Blum under PRG-Schultz's Shareholder Rights Plan. Upon its purchase of the
approximately 4.34 million shares, Berkshire is expected to own approximately
6.7% of the outstanding common stock of PRG-Schultz. These ownership percentages
do not include any shares that Berkshire or Blum may acquire as a result of the
put/call arrangements described above.
The Schultz holders will continue to own approximately 1.5 million shares, or
approximately 2.3% of PRG-Schultz's outstanding common shares, after the sale
and after giving effect to full exercise of the option and put/call arrangements
described above. Each of Berkshire and Blum have agreed with the Company to not
sell any shares acquired in the transaction prior to January 24, 2004, except
for transfers to affiliates and transfers approved by the Company's board of
directors. Beginning January 24, 2004, both Berkshire and Blum will have
registration rights with certain limitations.
The Company is discussing with its bank syndicate the conditions under which the
Company may take advantage of the option opportunities.
The Company also announced that, upon the close of the sale transactions, Howard
Schultz will retire as chairman of the board, but will remain a director of the
Company. At that time, John Cook, chief executive officer, will reassume the
additional responsibilities of chairman of the board of directors. The Company
also announced that current PRG-Schultz directors Andrew Schultz and Nate Levine
will resign from the board, upon the close of the sale transactions. The Company
does not intend to replace these directors at this time, and the size of the
board has been reduced to 11. As announced in a separate press release today,
Mark Perlberg, chief operating officer, has been elected president effective
immediately.
Cook said, "I thank Howard for his vision, dedication and commitment to this
company and our industry. Howard has devoted the better part of his professional
career to the development of the accounts payable recovery auditing business and
he has been a driving force in making PRG-Schultz the most comprehensive
provider of accounts payable recovery services in the industry. The PRG-Schultz
family is grateful for all of Howard's efforts, including his years of service
to HS&A and later PRG-Schultz. We all look forward to his continuing
contributions as a director of the Company, and I personally look forward to his
counsel and insight as the founder of this industry for many years to come. I
would also like to thank Andrew and Nate for their contributions to our
shareholders and the Company. I wish them future success."
Howard Schultz said, "I am very proud of the success we have achieved in making
PRG-Schultz an unmatched leader in our industry. With the successful integration
of our two companies essentially complete, this is a logical time for me to
retire as chairman. There is no better group to lead PRG-Schultz through its
next phase of growth and development than John Cook, Mark Perlberg and their
management team. I will continue to enthusiastically support PRG-Schultz and I
intend to remain an active and involved member of the board and a shareholder in
the Company."
About PRG-Schultz International, Inc.
Headquartered in Atlanta, PRG-Schultz International, Inc. (PRG-Schultz) is the
world's leading provider of recovery audit services. PRG-Schultz employs
approximately 3,500 employees, providing clients in over 40 countries with
insightful value to optimize and expertly manage their business transactions.
Using proprietary software and expert audit methodologies, PRG-Schultz industry
specialists review client invoices, purchase orders, receiving documents,
databases, and correspondence files to recover lost profits due to overpayments
or under-deductions. PRG-Schultz is retained on a pay-for- performance basis,
receiving a percentage of each dollar recovered. Additional information may be
found at http://www.prgx.com .
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About Blum Capital Partners LP
Blum Capital Partners is a leading strategic block and private equity investment
firm with approximately $4.8 billion of equity capital under management,
including affiliates. Blum Capital Partners was founded in 1975 and has invested
in a wide variety of businesses in partnership with management teams to create
long-term value. Additional information may be found at
http://www.blumcapital.com .
About Berkshire Partners LLC
Berkshire Partners is an active investor in the private equity market managing
approximately $3.5 billion of equity capital. Through its 18-year investment
history, Berkshire has invested in over 70 companies with a primary focus on
building solid, growth-oriented companies in conjunction with strong,
equity-incented management teams. Berkshire invests in a number of industries
including manufacturing, retailing, transportation, telecommunications and
business services. Additional information may be found at
http://www.berkshirepartners.com .
SOURCE PRG-Schultz International, Inc.
CONTACT:
Investors - Leslie H. Kratcoski, Investor Relations,
+1-770-779-3099, or Media - Michelle B. Duncan, Corporate Communications,
+1-770-779-3295, both of PRG-Schultz International, Inc.
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