SALEM, N.H. and OLATHE, Kan., Dec. 2,
2019 /PRNewswire/ -- Standex International Corporation
("Standex") (NYSE: SXI) and Torotel, Inc. ("Torotel"), (OTC:
TTLO), today announced that they have entered into a definitive
agreement for Standex to acquire Torotel for approximately
$48 million in cash, which includes
the assumption of net debt of approximately $1.4 million. The transaction is expected to
close in the first calendar quarter of 2020 and is subject to
customary closing conditions and regulatory approvals, including
the approval of Torotel shareholders. Standex expects the
acquisition to be slightly accretive to its earnings in its first
year of ownership excluding one-time purchase accounting and
transaction costs.
"Torotel is a strong strategic fit with highly complementary
capabilities to our existing high reliability magnetics portfolio,
further adding significant technical and application expertise as
well as strengthening our value proposition with industry leading
customers," commented Standex President and Chief Executive Officer
David Dunbar.
Torotel specializes in the custom design, manufacture and sale
of a wide variety of precision magnetic components including
electro-mechanical assemblies, high voltage transformers, dry-type
transformers, toroidal coils, inductors, reactors and chokes
for use in equipment such as aircraft navigational equipment,
digital control devices, medical equipment, avionics equipment,
down-hole drilling, conventional missile guidance systems, and
other defense and commercial aerospace applications.
Commenting on the transaction, Herb
Sizemore, Chairman, President and CEO of Torotel, stated,
"We are excited to join a global leader like Standex with a similar
culture and execution focus to our own. We see this as a
great opportunity for our employees and customers. The acquisition
will allow us to leverage our shared expertise, manufacturing
know-how and solid customer relationships. As a result, we expect
to be able to compete more effectively, particularly in the
aerospace and defense sectors."
"Torotel's customized and highly-engineered solutions are very
well-positioned in the aerospace and defense sectors, particularly
for new platforms that are in the early stages of ramping. These
end markets are characterized by large and growing addressable
markets with long-term contracts based on strong
engineer-to-engineer relationships and demanding technical
standards, requiring close partnership with suppliers," continued
Mr. Dunbar.
"Standex has a very focused and methodical approach to
integrating acquisitions and realizing commercial opportunities
that we have successfully demonstrated in prior transactions.
As a result, we believe that we will create significant value
from this acquisition for our customers and shareholders as we
further transform Standex into a more focused industrial company
with significant runway for higher growth and profitability.
We look forward to welcoming the Torotel team and employees to our
company," concluded Dunbar.
Founded in 1956, Torotel, Inc. is a leading designer and
manufacturer of custom magnetics products primarily for the
aerospace and defense industries. Torotel's trailing
twelve-month revenues are approximately $24
million. Torotel, which has 174 employees, is headquartered
in Olathe, Kansas and has
operating facilities in Olathe and
Hatfield, Pennsylvania.
Terms of Transaction and Financing
Standex's $48 million offer, which
includes the assumption of net debt of approximately $1.4M, results in merger consideration of
$7.77 per share in cash to Torotel
shareholders. In addition to the purchase price, Standex will
absorb approximately $8 million of
transaction costs incurred by Torotel. To finance the transaction,
Standex will be utilizing a portion of the $257 million available under its revolving credit
facility at the end of its fiscal first quarter at September 30, 2019.
Consummation of the transaction is dependent upon approval of
holders of two-thirds of Torotel's outstanding shares. In
connection with Torotel's entry into the definitive agreement,
certain significant shareholders and each director and executive
officer holding shares, who collectively own approximately 62% of
Torotel's outstanding shares, have signed voting agreements
committing to vote their shares in favor of the transaction.
Torotel will call a special meeting of its shareholders to approve
the transaction and will file a Proxy Statement with the Securities
and Exchange Commission in advance of the special meeting.
It is anticipated that the special meeting of Torotel's
shareholders to secure the necessary vote will be held during the
first calendar quarter of 2020, with closing of the transaction
occurring shortly thereafter.
Additional Information about the Proposed Transaction and
Where You Can Find It
BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED
TRANSACTION, TOROTEL SHAREHOLDERS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION.
The proxy statement and other relevant materials, and any other
documents filed by Torotel with the SEC, may be obtained free of
charge at the SEC's website at www.sec.gov. In addition,
shareholders of Torotel may obtain free copies of the documents
filed with the SEC by contacting Torotel's Chief Financial Officer
at (913) 747-6111, or by writing to Chief Financial Officer,
Torotel, Inc., 520 North Rogers Road, Olathe, Kansas 66062.
About Standex
Standex International Corporation is a multi-industry
manufacturer in five broad business segments: Engraving,
Electronics, Engineering Technologies, Hydraulics, and Food Service
Equipment with operations in the United
States, Europe,
Canada, Japan, Singapore, Mexico, Brazil, Turkey, South
Africa, India and
China. For additional information, visit the Company's
website at http://standex.com/.
About Torotel
For additional information, visit the Company's website at
http://www.torotelproducts.com/.
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SOURCE Standex International Corporation