The sale of Butte’s MSE Technology Applications, Inc. to a Florida-based technology holdings group is off, according to a joint announcement from both companies Thursday.
Global Technology Holdings, Inc. and the Montana Economic Revitalization and Development Institute – current owners of MSE – have mutually parted ways after it initially appeared they had a deal in place last month.
Sides announced a purchase agreement on Oct. 5 where Global Technology Holdings would assume operation of MSE and all subsidiaries effective Oct. 25. Specific terms were never disclosed.
But MERDI President Jim Kambich told The Montana Standard Thursday they have since mutually decided to terminate the agreements and discontinue the acquisition.
“While MERDI and MSE are obviously disappointed that we will not be proceeding with the Global deal, we understand that Global was within their contractual rights to terminate the agreements as contemplated,” Kambich said in the release.
Kambich declined further comment on the direction of the company. MSE continues to operate with Tom Burkhart as chief operations officer and Helen Joyce as operations manager.
Global Technology Holdings, which works to acquire exclusive licenses and distribution contracts for products in the environmental and defense fields, reached a verbal agreement with MERDI to buy MSE in July.
MSE is a longtime Butte engineering company, which currently employs 60 people – including 40 full-time employees and 20 part-time employees, down from 175 employees in 2008.
Jim Fallacaro, president of Global Technologies, planned to relocate his companies and holdings to Butte. He previously told the Standard he hoped to hire or rehire 30 to 40 employees within the first three months after completing the sale, and instill a renewed sense of job security.
Instead, Fallacaro said in the release that there were “just too many hurdles that arose during due diligence that could not be overcome.”
“We are extremely disappointed this deal did not work out,” Fallacaro said. “Both sides were working very hard to complete this deal.”
Fallacaro also declined further comment when contacted Thursday.
The sale of MSE to Global was supposed to be finalized in September, but delayed after the Securities and Exchange Commission suspended trading of Fallacaro’s Global Technologies Group for 10 days. Global Technologies Group is a different company from Global Technology Holdings, though Fallacaro is the president of both.
At that time, Fallacaro issued a letter to shareholders taking responsibility for the suspension. He explained the SEC sought “financial information needed … to comply with the reporting company regulations, stemming from errors made in 2007 and to the present 10Q.” The company has since returned to trading.
Kambich previously told the Standard the suspension was not a factor in trying to finish the deal.
— Reporter George Plaven may be reached at 496-5597, or via email at george.plaven@lee.net . Follow him at Twitter.com/ @George_Plaven.
