Direct phone: 404.873.8706
Direct fax: 404.873.8707
E-mail: robert.dow@agg.com
www.agg.com
September 8, 2016
VIA EDGAR
Mr. Nicholas P. Panos
Senior Special Counsel
Office of Mergers and Acquisitions
U.S. Securities and Exchange Commission
Mail Stop 3628
100 “F” Street, N.E.
Washington, D.C. 20549-3628
Re: Marine Products Corporation
Schedule TO
Filed August 26, 2016
File No. 005-61531
Dear Mr. Panos:
On behalf of our client, Marine Products Corporation (the “Company,” or “Marine Products”), we are submitting this letter in response to the comments of the Staff of the Securities and Exchange Commission (the “Commission”) in a letter dated September 6, 2016 (the “Comment Letter”) with respect to above referenced Schedule TO (the “Schedule TO”). For the convenience of the Staff, each of the Staff’s comments is restated in italics prior to the response to such comment. The Company intends to file Amendment No. 1 to the Schedule TO to provide additional disclosure in response to the Comment Letter.
General
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1.
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Please provide the information required pursuant to General Instruction C to Schedule TO with regard to each executive officer and director of the Company, or advise. Also provide the information required under Item 1003(a) of Regulation M-A pursuant to Item 3 of Schedule TO with regard to these.
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Response:
The Offer to Purchase filed with the original Schedule TO includes most of the items referenced in your comment. There were two items missing, specifically, the addresses of each officer and director and a statement that none of the officers and directors has any of the specified plans or proposals. Attached is a chart showing the location of each item within the Offer
to Purchase. Also attached is a draft Addendum to the Offer to Purchase to be filed with Amendment No. 1 providing the two additional items.
Source and Amount of Funds, page 22
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2.
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We read the consolidated balance sheet included within the Form 10-Q filed August 1, 2016. Please advise us what financial resources constitute “working capital.” In addition, please revise to disclose any alternative financing arrangements or alternative financing plans in the event the primary financing plan falls through. If no such arrangements exist, please revise to so state. Refer to Item 1007(b) of Regulation M-A.
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Response:
The Company expects to fund the tender offer through a combination of cash flow from operations and the sale of its highly liquid short-term and long-term marketable securities. The Company does not have an alternative financing plan due to the sufficiency of funds that will be available from the sale of such marketable securities. We have provided additional disclosure on the point in the draft Addendum to the Offer to Purchase to be filed with Amendment No. 1.
The Company has authorized us to confirm on its behalf that they acknowledge that (a) the Company is responsible for the adequacy and accuracy of the disclosure in the filings, (b) staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings, and (c) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Attached is a letter signed by Ben M. Palmer, Chief Financial Officer of Marine Products, on behalf of the Company.
If you have any questions, please do not hesitate to contact me at (404) 873-8706.
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Very truly yours
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ARNALL GOLDEN GREGORY LLP
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/s/ Robert F. Dow
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Robert F. Dow
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cc: Mr. Ben M. Palmer
Jonathan Golden, Esq.
B. Joseph Alley, Jr., Esq.
Enclosures: Letter from Marine Products Corporation
Chart of Disclosure Items
Draft Addendum to Offer to Purchase
2801 Buford Highway, Suite 520, Atlanta, GA 30329. Telephone: (404) 321-7910 Facsimile: (404) 321-5483
September 8, 2016
On behalf of Marine Products Corporation, I acknowledge that (a) the Company is responsible for the adequacy and accuracy of the disclosure in the filings, (b) staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings, and (c) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
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MARINE PRODUCTS CORPORATION
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By:
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/s/ Ben M. Palmer
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Name:
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Ben M. Palmer
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Title:
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Vice President and Chief Financial Officer
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Date:
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September 8, 2016
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Chart of Disclosure Items
Marine Products Corporation
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Tender Offer - Required Disclosure Items Raised in Comment letter
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Reg. M-A Item No.
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Description of Item
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Included in OTP filed 8/26/16?
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Additional disclosure required
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1003(a)
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Name and address of each person
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No
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Addresses added for D&Os
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1005(e)
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D&O agreements involving securities
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Yes p. 26
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N/A
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1006(a)
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Purpose of transaction
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Yes p. 12
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N/A
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1006(b)
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Whether securities retired, etc.
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Yes p. 14
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N/A
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1006(c)
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Plans (for D&O)
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No
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Added statement that no such plans exist for D&Os
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1007(a)
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Source of funds
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Yes p. 22
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Additional discussion provided on source
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1007(b)
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Conditions
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Yes p. 20
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N/A
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1007(c)
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Borrowed funds
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Yes p. 22
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N/A
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1008(a)
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Securities ownership
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Yes p. 24-25
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N/A
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1008(b)
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Securities transactions
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Yes p. 25
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N/A
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Draft Addendum to Offer to Purchase dated August 26, 2016
Updated as of September 8, 2016
The Offer to Purchase (“Offer to Purchase”) attached to the Schedule TO (“Schedule TO”) of Marine Products Corporation (the “Company”) filed on August 26, 2016, is amended as indicated below. Except as expressly set forth herein, this Amendment does not reflect events occurring after the date of the Schedule TO or modify or update any of the other disclosures contained therein in any way other than as required to reflect the amendments discussed below.
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2.
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Purpose of the Offer; Certain Effects of the Offer
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Section 2 is amended to add the following:
Based on our records and information provided to us by our affiliates, directors and executive officers, neither we nor, to the best of our knowledge, any of our affiliates, directors or executive officers, have any plans related to the events discussed on p. 14 of the Offer to Purchase.
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Source and Amount of Funds
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Section 9 is amended to read as follows:
We will use cash flow from operations and funds from selling our marketable securities to fund the purchase of the shares tendered in the Offer and to pay fees and expenses related to the Offer. Assuming that the Offer is fully subscribed for 3,200,000 shares, we expect the aggregate purchase price for the shares, together with all related fees and expenses, to be approximately $29.1 million ($31.8 million if the Offer is increased to 3,500,000 shares). For the second quarter of 2016, we had positive cash flow from operations of approximately $10.8 million. As of June 30, 2016 we held highly liquid short-term and long-term marketable securities with an aggregate market value of $47.4 million. We do not have an alternative plan for financing the tender offer due to the sufficiency of funds that will be available from the sale of such marketable securities. The Offer is not conditioned upon financing, although the Offer is subject to certain conditions. See Section 7.
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11.
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Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares
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Section 11 is amended to add the following:
Listed below are the names and addresses of the Officers, Directors and holders of more than 5% of the common stock of the Company:
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R. Randall Rollins
Chairman of the Board
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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Gary W. Rollins
Vice Chairman and Chief Executive Officer, Rollins, Inc.
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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Gamco Investors, Inc.
One Corporate Center
Rye, NY 10580
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Richard A. Hubbell
President and Chief Executive Officer
2801 Buford Highway NE, Suite 520
Atlanta, Georgia 30329
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Ben M. Palmer
Vice President, Chief Financial Officer and Treasurer
2801 Buford Highway NE, Suite 520
Atlanta, Georgia 30329
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Linda H. Graham
Vice President and Secretary
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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Bill J. Dismuke
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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Larry Prince
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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Henry Tippie
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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James B. Williams
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
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