Anaren is reviewing strategic alternatives after Vintage Capital offered to buy shares it does not already own in the US satcoms components maker at US$23 each.
Valuing the company at more than US$300m, the unsolicited and unbinding bid represents a 14%…
Anaren is reviewing strategic alternatives after Vintage Capital offered to buy shares it does not already own in the US satcoms components maker at US$23 each.
Valuing the company at more than US$300m, the unsolicited and unbinding bid represents a 14% premium to the stock’s previous closing price.
Vintage Capital, which is already Anaren’s largest shareholder with a stake of around 13%, said its offer is also a premium to any monthly or weekly closing price since 2001.
In a letter to Anaren’s board of directors on 15 April, Vintage Capital managing partner Brian Kahn said: “Our 17 years of familiarity with Anaren and its industries uniquely position us to close this transaction quickly, and we are prepared to proceed immediately to definitive documentation.”
Kahn added that the investment firm envisaged “significant roles” for the company’s existing management team after the acquisition.
The offer came just a week after private equity firm Discovery Group, which holds around 6% of the manufacturer, called on Anaren’s board to engage with the “multiple parties” it believes are interested in acquiring it.
A letter, sent on 8 April by its managing partner Michael Murphy, said: “After conducting significant industry research we have come to believe there are multiple parties that have a keen interest in acquiring Anaren.
“Unfortunately we also believe that the Anaren directors have failed to fulfil their duty to shareholders by translating that high degree of strategic interest into an improvement in shareholder value through the vigorous pursuit of a sale of the company at a substantial premium.”
Murphy said, because of the company’s performance and the feeling that consolidation in the industry will continue, a sale to a strategic buyer could achieve a value in the US$26-US$30 per share range, or a 40%+ premium to its stock price.
He pointed to the M&A market for “high value companies like Anaren” being very strong, highlighting recent acquisitions of businesses including GeoEye, Micronetics, Goodrich and EMS Technologies.
After receiving the unsolicited bid from Vintage Capital, Anaren’s board said it will form an independent committee of directors to review the offer and consider strategic alternatives.
The committee will be financially advised by Moelis & Company and Houlihan Lokey. Dorsey & Whitney and Bond, Schoeneck & King are its legal advisers.
Based in New York, Anaren provides integrated microwave component assemblies and subsystems for the satcoms, wireless communications, and defence electronics markets. Its products are sold to space companies including Boeing Satellite, ITT, Lockheed Martin, Northrop Grumman, and Raytheon.
Anaren posted US$147m in net sales for 2012, of which US$95m was derived from space and defence work. 2011 total net sales reached US$179m.
Net income for 2012 fell to US$8.6m, compared with US$16.4m for the corresponding period in the previous year.
