Conn. firm buying 80% of Deer Valley

TAMPA — Stamford, Conn.-based Peerless Systems Corp. has entered into a definitive stock purchase agreement with Vicis Capital Master Fund and Tampa-based Deer Valley Corp. (symbol: DVLY; recent price: $0.86) to acquire 80% of the outstanding common stock of Deer Valley. The deal is scheduled to close by Sept. 30.

Peerless Systems agreed to acquire 12.31 million shares of Deer Valley common stock from Vicis for $3.6 million and another 126,000 shares of common stock from Deer Valley itself for $81,900.

Deer Valley's wholly owned subsidiaries Deer Valley Homebuilders Inc., Deer Valley Financial Corp. and Deer Valley Home Repair Services Inc. design and manufacture factory built homes, provide dealer inventory-secured financing and offer warranty and repair services. Deer Valley's manufacturing plant in Guin, Ala., produces homes, which are marketed in 14 states primarily in the southeastern and south central regions of the United States.

“We are pleased to have this opportunity to acquire Deer Valley at a fair valuation,” Timothy Brog, chairman and CEO of Peerless Systems, says in a press release. “We also believe that Deer Valley is well positioned to benefit from the recovery of the manufactured home industry in the coming years.”

Deer Valley's trailing 12 months' revenue was $29.4 million and its earnings before interest, tax, depreciation and amortization (EBITDA) $1.3 million. Its net income for 2013 was $815,000. However, its book value as of June 28 was $9.7 million.

Founded in 1982, Peerless Systems is principally a technology company. It licenses imaging and networking technologies to manufacturers of printers, copiers and multifunction devices. It sold a number of its imaging and networking technologies to Kyocera-Mita Corp. in 2008.