Steel Connect, Inc.

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Ademi LLP is investigating Steel Connect (NASDAQ:STCN) for possible breaches of fiduciary duty and other violations of law in its transaction with Steel Partners.

Ademi LLP alleges Steel Connect’s financial outlook and prospects are excellent and yet Steel Connect holders will receive only $1.35 per share in cash and one contingent value right to receive their pro rata share of net proceeds, to the extent such net proceeds exceed $80 million plus certain related costs and expenses, if Steel Connect’s ModusLink subsidiary is sold during the two-year period following completion of the merger. The transaction agreement unreasonably limits competing bids for Steel Connect by imposing a significant penalty if Steel Connect accepts a superior bid. Steel Connect insiders will receive substantial benefits as part of change of control arrangements.

We are investigating the conduct of Steel Connect’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Steel Connect.