CDI Corp. Proposes Acquisition of RCM Technologies for $5.20 per Share of Common Stock

PHILADELPHIA, June 3 /PRNewswire-FirstCall/ -- CDI Corp. (NYSE: CDI) has made a proposal to acquire all the outstanding shares of RCM Technologies, Inc. (RCM) common stock for $5.20 per share. The all cash proposal was made in a letter sent to the Board of Directors of RCM on May 21, 2010.  As of June 3, 2010, RCM had not yet responded to CDI's proposal.  

CDI President & Chief Executive Officer Roger H. Ballou stated, "While we still prefer to work together with RCM and its board of directors to negotiate a mutually beneficial agreement for our respective stakeholders, we feel the significance of this proposal requires us to take our proposal directly to RCM's shareholders. We believe that it is critical to allow the RCM shareholders to evaluate our proposal which would provide significant, certain and immediate value to the shareholders. CDI has a high regard for RCM's business and its management team and looks forward to making the most of the combined business."

In light of the compelling reasons for a combination of CDI and RCM, and the importance of allowing the companies' respective shareholders to capitalize on the benefits of the proposed transaction sooner rather than later, CDI is publicly releasing the contents of the May 21, 2010 letter to the Board of Directors of RCM:

Dear Board Member,

We are writing to you as a member of the Board of Directors of RCM Technologies, Inc., on behalf of CDI Corporation, to outline the terms on which CDI proposes to acquire all of the outstanding shares of RCM.  Over the last several months, we have had a number of conversations with Mr. Leon Kopyt to highlight for him the many advantages that a combination with CDI would provide for your shareholders.  Unfortunately, these conversations have not been fruitful.  Having not been able to move forward through that channel and because we believe that the opportunities for our companies and their shareholders are so compelling we have decided to make our proposal directly to you as members of the Board of Directors.  A combination between CDI and RCM will offer significant and certain value to RCM's shareholders and other constituencies, including its employees and customers.  We are enthusiastic about our proposal and we are committed to pursuing this transaction.

A transaction with us now creates certain cash value for RCM shareholders, will provide significant advantages to RCM customers and employees and will eliminate the substantial risks that RCM faces today as a relatively small player in an industry facing significant short to mid term challenges because of today's volatile business and economic conditions.  

Based on our review of your publicly available information and the materials RCM has supplied to us, we are prepared to make an offer of $5.20 per common share (based on 12,999,178 shares).  

Our proposed price implies a premium of approximately 37% to RCM's closing share price on May 21, 2010, a premium of approximately 33% to RCM's average closing share price this past week, a premium of approximately 37% to RCM's twelve month high 30-day average closing share price, a premium of approximately 90% to RCM's twelve month weighted average closing share price, and a premium of approximately 269% to RCM's twelve month low closing share price.

Our proposal provides the following tangible benefits to RCM shareholders:

• Compelling Valuation – We are valuing RCM at a substantial premium to the trading price.
• All Cash – Our proposal is all cash.  
• No Financing Condition – CDI has a significant cash position and access to readily available credit that are more than sufficient to complete the transaction and, therefore, our proposal is not subject to any financing condition.
• Timing – Due to the complementary nature of our businesses and based on the work we have already done, we are in a position to proceed on an expeditious basis.

Apart from the compelling and immediate benefits of this transaction to RCM's shareholders, a combination with CDI makes great strategic sense for RCM and for you as members of the Board of Directors responsible for RCM's long-term success.  Presently, RCM is a small player in the engineering and IT outsourcing industries despite your talented management team and skilled employee base.  Although we are optimistic about the long-term prospects in these industries, in the short-term the challenges presented by the extremely volatile current economic conditions present significant risk for businesses like RCM that, despite its expertise and talent, lack scale and financial resources that may be necessary to survive and succeed in the short to mid-term.  CDI, with approximately $900 million in annual revenues and a well diversified portfolio of businesses and customers, has the staying power to successfully navigate the current economic conditions.  This belief in the industry and our strong position in the market allow us to offer the significant premium that we are proposing.  Our proposal also eliminates the substantial risks that RCM's shareholders currently face because of RCM's market position.  

We are prepared to meet with you and your management team at your earliest convenience to commence discussions regarding our proposal.  We are prepared to finalize due diligence and negotiate definitive agreements immediately.

We would unquestionably prefer to work cooperatively with you to complete this transaction.  However, if we are not able to move forward with a transaction on this basis, we are prepared to take all appropriate actions to enable RCM's shareholders to evaluate our proposal.

This letter is not intended to create or constitute any legally binding obligations, liability or commitment by us regarding the proposed transaction and there will be no legally binding contract or agreement between us unless and until a definitive agreement is executed.

We look forward to discussing with you in the very near future.

Very truly yours,

Roger H. Ballou

President & CEO

Company Information

Headquartered in Philadelphia, CDI Corp. (NYSE: CDI) is a leading provider of engineering & information technology outsourcing solutions and professional staffing.  Its operating units include CDI Engineering Solutions, CDI IT Solutions, CDI AndersElite Limited, and Management Recruiters International, Inc.  Visit CDI at www.cdicorp.com.

Caution Concerning Forward-Looking Statements

This communication does not constitute an offer, or the solicitation of an offer, to buy or sell any securities or a solicitation of any vote or approval.  Statements in this release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties.  Actual results could differ materially because of factors such as CDI's ability to achieve the synergies and value creation contemplated by the proposed transaction, CDI's ability to promptly and effectively integrate the businesses of RCM and CDI, the timing to consummate the proposed transaction and any necessary actions to obtain required regulatory approvals, and the diversion of management time on transaction-related issues.  For further information regarding risks and uncertainties associated with CDI's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of CDI's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting CDI's Investor Relations department at (215) [569-2200] or at CDI's Web site at http://www.cdicorp.com.  All information in this communication is as of June 3, 2010.  CDI Corp. undertakes no duty to update any forward-looking statement to conform the statement to future events or to changes in the company's expectations, except as required by law.

SOURCE CDI Corp.