Aerospace and defence communications equipment maker Emrise has sold its electronic devices division for US$22m as it prepares to enter liquidation.
The US-headquartered group sold the unit to local aerospace and defence manufacturer Data Device…
Aerospace and defence communications equipment maker Emrise has sold its electronic devices division for US$22m as it prepares to enter liquidation.
The US-headquartered group sold the unit to local aerospace and defence manufacturer Data Device Corporation. It expects US$11m in net proceeds from the all-cash deal, excluding related expenses and the US$1.3m being placed in escrow.
DDC chief executive Vincent Buffa said: “The acquisition of Emrise Electronics greatly expands DDC’s power management product offering for the commercial aerospace and defence markets while expanding our business base in the European market with best-in-class power conversion products.”
The deal, which is subject to the approval of the majority of Emrise’s shareholders, has already received the backing of stockholders collectively owning about 11% of the company.
Emrise also said it is looking into strategic alternatives for CXR Anderson Jacobson (CXR), its France-based communications equipment business unit.
It hopes to use proceeds from both sales, along with the liquidation of the rest of the business, to repay its stockholders through one or more instalments.
The Benchmark Company and Hermes Capital Advisors are financially advising Emrise’s board on the sale of its electronic devices subsidiary, and Headwaters MB provided a fairness opinion.
Luckosky Brookman is serving as legal adviser to the special committee in connection with the deal and dissolution. Olshan Frome Wolosky is acting as counsel to Emrise for the deal and the dissolution.
DDC hired Latham & Watkins for legal advice.
Emrise was founded in 1983 and also operates from an office in the UK. Its electronic devices unit provides power conversion, RF and microwave device products, as well as subsystems. Its telecoms group offers transmission and network access equipment, timing and synchronisation systems and test equipment.
It posted US$8.8m in net sales for Q3 2014, a 33% increase compared with the corresponding period in 2013. Adjusted EBITDA for Q3 2014 was US$1m, compared with a loss of US$166,000 for Q3 2013.
The group also sold certain assets and liabilities last year that were part of its under performing US-based telecoms equipment division.
As of 30 September 2014, Emrise’s total debt obligations were US$5.5m, and stockholders’ equity was US$9.6m, compared with US$6.5m and US$11.2m, respectively, at the end of 2013.
