Sparton Corporation to be acquired by Cerberus
Sparton Corporation announced on December 12 that it has entered into a definitive agreement to be acquired by an affiliate of Cerberus Capital Management, L.P., a global leader in alternative investing. Under the terms of the agreement, Cerberus will acquire all outstanding shares of Sparton’s common stock for $18.50 per share in cash.
The $18.50 per share consideration represents a premium of approximately 41% over Sparton’s closing share price on December 11, 2018. The Sparton board of directors has unanimously approved the agreement and recommends that the company’s shareholders approve the transaction.
“This transaction is the result of the significant time and effort the company has invested in its previously announced process to explore strategic alternatives, including a potential acquisition of Sparton,” said Joseph Hartnett, interim president and chief executive officer of Sparton. “We are pleased to have successfully concluded our process with a transaction that delivers significant value to the shareholders of Sparton.”
Hartnett continued, “In addition to delivering immediate value to our shareholders, this transaction provides Sparton with a long-term partner that is focused on building upon our strong platform. Cerberus is recognized as a leading investor in global technology and manufacturing companies that brings significant operational expertise, in addition to its financial capital and acumen. Together, we will be able to capitalize on strategic growth opportunities, while continuing to meet the needs of our customers by delivering high-quality, innovative solutions and services.”
Tarek Ajouz, managing director of Cerberus, commented, “Sparton has a proven track record as a leading manufacturer of complex electromechanical devices for leading businesses and government agencies around the world. With its industry-leading solutions and strong customer relationships, we believe there is significant opportunity to further expand the company’s leadership position in its markets. We look forward to partnering with Sparton’s talented employees to serve its customers with best-in-class solutions, build upon the foundation of excellent capabilities already in place, and help Sparton achieve its full potential for growth.”
The transaction, which is subject to the receipt of Sparton shareholder approval, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions, is expected to close in the first calendar quarter of 2019. Additional details regarding the transaction will be set forth in a proxy statement that will be sent by Sparton to its shareholders in advance of the special meeting at which Sparton’s shareholders will be asked to approve the transaction.