EDAC Technologies Corp. (EDAC) said Monday morning that it has agreed to be acquired for about $104.1 million by an affiliate of private equity firm Greenbriar Equity Group LLC. The definitive agreement values EDAC, a Farmington, Connecticut-based designer and manufacturer of precision component for aerospace and industrial applications, at $17.75 per share, pursuant to a cash tender offer and second step merger. That’s an 8 percent premium to Friday’s closing price.
The price is a 29.6 percent premium over EDAC’s average closing price in the three months leading into March 15, 2013 and approximately a 20 percent premium over EDAC’s one-month average price ending March 15.
EDAC board and executives, which cumulatively control about 18.2 percent of the company, have agreed to tender their shares and recommend that shareholders accept the offer as well.
“We believe this transaction is in the best interests of the company and our shareholders. Our agreement with Greenbriar represents an attractive valuation for our shareholders, and we look forward to closing the transaction expeditiously,” said Dominick Pagano, EDAC President and Chief Executive Officer in a corporate statement.
Per the agreement between EDAC and Greenbrier’s subsidiary, GB Aero Engine LLC, a cash tender offer to purchase all of the outstanding shares of EDAC’s common stock will be submitted no later than March 26, 2013.
Pending all approvals, the transaction is expected to close in the second quarter.
EDAC operates through two divisions, an aerospace unit and an industrial division, with the aerospace arm generating about 70 percent of total corporate revenue as of the latest quarter. The aerospace unit, which includes EDAC Aero and EBTEC, a company acquired in June 2012, sells stationary components to blue chips like Boeing Co. (BA) for its Dreamliner aircraft and General Electric Co. (GE) for their GE90 aircraft engines.
On March 7, EDAC reported record sales of $28.4 million in the fourth quarter of fiscal 2012, up 25 percent from the year prior quarter. Net income for the quarter increased 31 percent from the 2011 quarter to $1.5 million, or 26 cents per share.
For all of 2012, revenue increased 23 percent to $106.5 million versus $86.6 million in 2011. Net income was $5.9 million, or $1.04 per share, compared to $3.4 million, or 68 cents per share in the previous year.
EDAC ended the year with a backlog of $304.0 million, compared to $252.1 million at the end of fiscal 2011.
Shares of EDAC gapped up near the buy-out price and have held that level throughout morning trading on Monday.
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