Premium machine, tools and accessories company Blount International Inc. BLT lately declared that it has entered into a authoritative agreement, under which it will be acquired by affiliates P2 Capital Partners, LLC (“P2 Capital Partners”) and American Securities LLC (“American Securities”). An all-cash deal, the buyout is valued at $855 million, including assumption of debt.
As per terms and conditions of the definitive agreement, Blount International would obtain $10.00 in cash for every share of its commonly held stock. This amount represents a premium of 86% to the closing price of the company’s stock on Dec 9, 2015, which is the last trading day before declaration of the planned transaction. The company finally accepted the offer after its Special Committee, inclusive of legal and financial advisors as well as certain independent directors, approved the deal. Notably, the agreement states that Blount International would be paying a termination fee of $7.3 million if the deal is accomplished according to the proposal placed during the ‘go-shop’ period. On the other hand, the termination fee would amount to $14.7 million if the merger deal is completed after the ‘go-shop’ tenure.
The deal is expected to augment the company’s shareholder value as well as support its strategic programs that aim to offset current macroeconomic challenges.
Moving Ahead
American Securities is a renowned private equity firm in the U.S., that invests in popular North American companies which generate revenues within $200 million–$2 billion or/and Earnings before interest, taxes, depreciation and amortization within $50–$200 million. On the other hand, P2 Capital Partners is an investment firm that spends money in the public market through a private-equity approach. Both institutions enjoy solid popularity in the market, in terms of making long-term investments in booming businesses.
Blount International is a leading multinational marketer and manufacturer of equipment, spare parts and accessories for professionals and consumers, operating mainly in three types of market segments; Farm, Ranch, and Agriculture (“FRAG”), Forestry, Lawn, and Garden (“FLAG”), and Concrete Cutting and Finishing (“CCF”). We believe the deal, post materialization, would serve to enhance the company’s business performance as well as brand value in the near future.
Stocks to Consider
Blount International presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include AGCO Corporation AGCO, Aggreko plc ARGKF and Belden Inc. BDC. All three stocks hold a Zacks Rank #2 (Buy).
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