Arotech Corporation (NasdaqGM: ARTX) today announced that it has
entered into a definitive agreement with an affiliate of Greenbriar
Equity Group, L.P. (“Greenbriar”) under which the affiliate will
acquire all outstanding shares of Arotech common stock for $3.00
per share in cash, representing an aggregate equity value of
approximately $80.8 million.
The $3.00 per share cash consideration
represents a premium of approximately 32.7% to Arotech’s closing
share price on September 20, 2019, the last full trading day before
today’s announcement. The transaction, which was unanimously
approved by Arotech’s Board of Directors upon recommendation by a
Special Committee of the Board, is expected to close in the first
quarter of 2020. Following completion of the transaction, Arotech
expects it will remain headquartered in Ann Arbor, MI.
Transaction Details
Under the terms of the merger agreement,
Arotech’s Board of Directors, with the assistance of its financial
advisor, will conduct a 30-day “go-shop” process following the date
of the announcement of the merger agreement, during which it will
actively initiate, solicit, facilitate, encourage and evaluate
alternative acquisition proposals, and potentially enter into
negotiations with any parties that offer alternative acquisition
proposals. Arotech will have the right to terminate the merger
agreement to accept a superior proposal, subject to the terms and
conditions of the merger agreement. There can be no assurance that
this “go-shop” process will result in a superior proposal or that
any other transaction will be approved or completed, and Arotech
does not intend to disclose developments with respect to the
solicitation process unless and until its Board of Directors makes
a determination requiring further disclosure.
The proposed transaction is subject to, among
other customary closing conditions, approval by the holders of a
majority of the shares of Arotech common stock. There are no
financing contingencies contemplated under the terms of the merger
agreement. Following completion of the transaction, Arotech will
become a privately-held company and shares of Arotech’s common
stock will no longer be listed on any public market.
Advisors
B. Riley FBR, Inc. is serving as exclusive
financial advisor to Arotech, and Lowenstein Sandler LLP is serving
as legal counsel. Kirkland & Ellis LLP is serving as legal
counsel to Greenbriar.
About Arotech Corporation
Arotech Corporation is a defense and security
company engaged in two business areas: interactive simulation and
mobile power systems.
Arotech is incorporated in Delaware, with
corporate offices in Ann Arbor, Michigan, and research, development
and production subsidiaries in Michigan, South Carolina, and
Israel. For more information on Arotech, please visit Arotech’s
website at www.arotech.com.
About Greenbriar Equity
Group
Founded in 1999, Greenbriar Equity Group is a
private equity firm with over $3.5 billion of committed capital
focused on investing in market-leading manufacturing and services
businesses in partnership with proven management teams. Greenbriar
looks to identify companies capitalizing on strong long-term growth
prospects that can benefit from Greenbriar’s industry knowledge,
operating capabilities, network of senior executive relationships,
strategic insight and access to capital. Sectors of particular
focus include aerospace and defense, industrial and business
services, transportation and logistics, and specialty
manufacturing. Additional information may be found at
www.greenbriarequity.com.
Additional Information about the
Proposed Merger Transaction and Where to Find It
This communication relates to the proposed
merger transaction involving Arotech Corporation (“Arotech”) and
may be deemed to be solicitation material in respect of the
proposed merger transaction. In connection with the proposed merger
transaction, Arotech will file relevant materials with the U.S.
Securities and Exchange Commission (the “SEC”), including a proxy
statement on Schedule 14A (the “Proxy Statement”). This
communication is not a substitute for the Proxy Statement or for
any other document that Arotech may file with the SEC or send to
Arotech’s stockholders in connection with the proposed merger
transaction. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND
SECURITY HOLDERS OF AROTECH ARE URGED TO READ THE PROXY STATEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT AROTECH, THE PROPOSED MERGER TRANSACTION AND
RELATED MATTERS. The proposed merger transaction will be submitted
to Arotech’s stockholders for their consideration. Investors and
security holders will be able to obtain free copies of the Proxy
Statement (when available) and other documents filed by Arotech
with the SEC through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed by Arotech with
the SEC will also be available free of charge on Arotech’s website
at www.arotech.com or by contacting Arotech’s Investor Relations
contact at Scott.Schmidt@arotechusa.com.
Participants in the
Solicitation
Arotech and its directors and certain of its
executive officers and employees may be deemed to be participants
in the solicitation of proxies from Arotech’s stockholders with
respect to the proposed merger transaction under the rules of the
SEC. Information about the directors and executive officers of
Arotech and their ownership of shares of Arotech’s common stock is
set forth in its Annual Report on Form 10-K for the year ended
December 31, 2018, which was filed with the SEC on March 7,
2019, its proxy statement for its 2019 annual meeting of
stockholders, which was filed with the SEC on March 22, 2019 and in
subsequent documents filed with the SEC, including the Proxy
Statement. Additional information regarding the persons who may be
deemed participants in the proxy solicitations and a description of
their direct and indirect interests in the merger transaction, by
security holdings or otherwise, will also be included in the Proxy
Statement and other relevant materials to be filed with the SEC
when they become available. You may obtain free copies of this
document as described above.
Cautionary Statement Regarding
Forward-Looking Statements
This communication contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Arotech generally identifies forward-looking
statements by terminology such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of these terms or other
similar words. These statements are only predictions. Arotech has
based these forward-looking statements largely on its then-current
expectations and projections about future events and financial
trends as well as the beliefs and assumptions of management.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond Arotech’s control. Arotech’s actual results could differ
materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to: (i) risks associated with Arotech’s ability to obtain the
stockholder approval required to consummate the proposed merger
transaction and the timing of the closing of the proposed merger
transaction, including the risks that a condition to closing would
not be satisfied within the expected timeframe or at all or that
the closing of the proposed merger transaction will not occur;
(ii) the outcome of any legal proceedings that may be
instituted against the parties and others related to the merger
agreement; (iii) the occurrence of any event, change or other
circumstance or condition that could give rise to the termination
of the merger agreement, (iv) unanticipated difficulties or
expenditures relating to the proposed merger transaction, the
response of business partners and competitors to the announcement
of the proposed merger transaction, and/or potential difficulties
in employee retention as a result of the announcement and pendency
of the proposed merger transaction; and (v) those risks
detailed in Arotech’s most recent Annual Report on Form 10-K and
subsequent reports filed with the SEC, as well as other documents
that may be filed by Arotech from time to time with the SEC.
Accordingly, you should not rely upon forward-looking statements as
predictions of future events. Arotech cannot assure you that the
events and circumstances reflected in the forward-looking
statements will be achieved or occur, and actual results could
differ materially from those projected in the forward-looking
statements. The forward-looking statements made in this
communication relate only to events as of the date on which the
statements are made. Except as required by applicable law or
regulation, Arotech undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the
occurrence of unanticipated events.
Investor Relations Contact:
Scott Schmidt Scott.Schmidt@arotechusa.com 800-281-0356
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