LGL Announces Exploration of Potential Spin-off of MTronPTI Business
August 12 2021 - 8:04AM
Business Wire
The LGL Group, Inc. (“LGL” or “the Company”) announced today
that its board of directors has authorized the company’s management
team to explore a potential spin-off of its MTronPTI business into
a newly created and separately traded public company.
The LGL Group continues to strive for profitable growth
internally and by acquisition. LGL believes that, if completed, the
potential spin-off would enable shareholders to more clearly
evaluate the performance and future potential of each entity on a
standalone basis, while allowing each to pursue its own distinct
business strategy and capital allocation policy. Separating
MTronPTI as an independent, publicly owned company positions the
business to increase value to both MTronPTI and LGL Group. The
spin-off permits each company to tailor its strategic plans and
growth opportunities, more efficiently raise and allocate
resources, including capital raised through debt or equity
offerings, flexibly use its own stock as currency for teammate
incentive compensation and potential acquisitions and provide
investors a more targeted investment opportunity.
The LGL Group has successfully spun off several businesses over
its history, including Lynch Interactive, The Morgan Group, Tremont
Advisors and others. MTronPTI itself sought to become an
independently listed company via an IPO, filing a form S-1
registration statement with Needham & Company as the
underwriter in 2000. This IPO was pulled as a result of market
conditions. MTron has an established and formidable presence in its
key markets today and if the spinoff is completed, the standalone
MTronPTI would continue providing market-leading engineered
solutions to its defense and aerospace customers. The potential
Spin-off is thus a continuation of the company’s strategy of
developing businesses and positioning them as independent entities
to enhance shareholder value and alignment. If LGL proceeds with
the spin-off, it would be structured as a tax-free, pro-rata
distribution to all LGL shareholders as of a record date to be
determined by the board of directors of LGL. If completed, upon
effectiveness of the transaction, LGL shareholders would own shares
of both companies.
“We are exploring a potential spin-off transaction because we
believe that, if completed, a spin-off may enhance the successful
operation of both the MTronPTI and the LGL businesses and increase
their respective values,” said Michael Ferrantino, CEO, LGL. “By
splitting the two businesses into separate companies, it may be
that the business and related investment spending and capital
allocation policies of each company could be managed consistently
with each business’ objectives. Establishing specific and
independent goals may enable both the LGL and MTronPTI businesses
to manage investments and objectives that are more closely tailored
to each business’ market needs and customer requirements. Should we
move forward with the spin-off, we would expect that the LGL
business would be focused on its holdings and investments, while
the MTronPTI business would be focused on long-term growth with
strong, differentiated profitability in the defense and aerospace
markets it serves.”
Completion of any spin-off would be subject to various
conditions, including final approval of LGL’s board of directors.
There can be no assurance that the potential spin-off transaction
will be completed in the manner described above, or at all. If LGL
proceeds with the spin-off, it does not expect to complete the
transaction earlier than the end of the last quarter of 2021.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor will there be
any sale of any securities in any state or other jurisdiction in
which such offer, solicitation or sale is not permitted.
(NYSE American: LGL) LGL Group, Inc. is a globally diversified
holding company with a history of operations dating back to
1914.
About The LGL Group, Inc.
The LGL Group, Inc., through its two principal subsidiaries
MTronPTI and PTF, designs, manufactures and markets
highly-engineered electronic components used to control the
frequency or timing of signals in electronic circuits, and designs
high performance frequency and time reference standards that form
the basis for timing and synchronization in various
applications.
Headquartered in Orlando, Florida, the Company has additional
design and manufacturing facilities in Yankton, South Dakota,
Wakefield, Massachusetts and Noida, India, with local sales offices
in Hong Kong and Austin, Texas.
For more information on the Company and its products and
services, contact James Tivy at The LGL Group, Inc., 2525 Shader
Rd., Orlando, Florida 32804, (407) 298-2000, or visit
www.lglgroup.com and www.mtronpti.com.
Caution Concerning Forward Looking Statements
This press release may contain forward-looking statements made
in reliance upon the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21 E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements include all statements that do not relate solely to
historical or current facts, and can be identified by the use of
words such as “may,” “will,” “expect,” “project,” “estimate,”
“anticipate,” “plan,” “believe,” “potential,” “should,” “continue”
or the negative versions of those words or other comparable words.
These forward-looking statements are not guarantees of future
actions or performance. These forward-looking statements are based
on information currently available to us and our current plans or
expectations, and are subject to a number of uncertainties and
risks that could significantly affect current plans, anticipated
actions and our future financial condition and results. Certain of
these risks and uncertainties are described in greater detail in
our filings with the Securities and Exchange Commission. We are
under no obligation to (and expressly disclaim any such obligation
to) update or alter our forward-looking statements, whether as a
result of new information, future events or otherwise.
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James Tivy The LGL Group, Inc. jtivy@lglgroup.com (407)
298-2000
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