– Platinum Equity to Acquire Electro Rent for
$13.12 per Share in All Cash Transaction –
Platinum Equity and Electro Rent Corporation
(Nasdaq:ELRC) today announced that they have entered into a
definitive agreement under which Electro Rent would be acquired by
Platinum Equity for approximately $323.4 million.
Under the agreement, Platinum Equity would acquire all of
Electro Rent’s common stock. Electro Rent stockholders will receive
$13.12 per share, representing a premium of 24.4% over the closing
price on May 27, 2016, and 34.8% over the average closing price of
Electro Rent’s common stock over the past three (3) months. In
light of the agreement, Electro Rent will not pay its next
quarterly common stock dividend scheduled for July 2016.
The agreement followed the unanimous recommendation of Electro
Rent’s board of directors. Completion of the transaction, which is
expected to close in the next 90 to 120 days, is subject to
customary closing conditions, including approval of Electro Rent’s
stockholders and various regulatory agencies.
Electro Rent Chairman Daniel Greenberg and a member of his
immediate family, who collectively own approximately 29% of the
company’s outstanding shares of common stock, have entered into
voting agreements in support of the sale and have granted an
affiliate of Platinum Equity irrevocable proxies to execute those
agreements.
Steven Markheim, recently named Chief Executive Officer of
Electro Rent, and Allen Sciarillo, recently named Chief Financial
Officer, will retain their current roles under the ownership of
Platinum Equity.
Upon completion of the transaction, Electro Rent’s common stock
will cease to be publicly traded. Houlihan Lokey acted as financial
advisor to the Strategic Alternatives Committee of the Board of
Directors of Electro Rent and Sheppard Mullin acted as Electro
Rent’s legal counsel. Latham & Watkins LLP is serving as legal
counsel to Platinum Equity.
“Electro Rent has built an excellent reputation as one of the
most well respected companies in its industry. Its team of
dedicated employees will continue to play an essential role in
providing Electro Rent’s customers and OEM partners with the
first-class service for which the company is known,” said Platinum
Equity Partner Louis Samson. “We look forward to working closely
with the company’s experienced leadership to put Electro Rent in
the best position to take full advantage of future
opportunities.”
“We are excited to begin this new phase in Electro Rent’s
history, and look forward to partnering with Platinum as we
continue to meet and exceed the needs of our customers and
manufacturing partners around the globe,” said Markheim. “The
transaction presents an outstanding opportunity for all of our
stakeholders, as we should greatly benefit from additional
resources and experience to further enhance our already high
inventory, service and support standards. Platinum is fully
committed to our industry and to ensuring Electro Rent’s
success.”
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity
(www.platinumequity.com) is a global investment firm with more than
$6 billion of assets under management and a portfolio of more than
25 operating companies that serve customers around the world.
Platinum Equity specializes in mergers, acquisitions and operations
– a trademarked strategy it calls M&A&O® – acquiring and
operating companies in a broad range of business markets, including
manufacturing, distribution, transportation and logistics,
equipment rental, metals services, media and entertainment,
technology, telecommunications and other industries. Over the past
20 years Platinum Equity has completed more than 175
acquisitions.
About Electro Rent
Electro Rent Corporation (www.ElectroRent.com) is one of the
largest global organizations devoted to the rental, leasing and
sales of general purpose electronic test equipment, personal
computers and servers.
Important Additional Information will be Filed with the
SEC
In connection with the proposed transaction, Electro Rent
Corporation will file or furnish relevant documents, including a
proxy statement, concerning the proposed transaction with the SEC.
Investors and stockholders of Electro Rent Corporation are urged to
read the proxy statement and other relevant materials when they
become available because they will contain important information
about Electro Rent Corporation and the proposed transaction. The
final proxy statement will be mailed to the company’s
stockholders.
Investors and stockholders may obtain a free copy of the proxy
statement and any other relevant documents filed or furnished by
Electro Rent Corporation with the SEC (when available) at the SEC’s
Web site at www.sec.gov. In addition, copies of the proxy statement
and other filings made by the Company with the SEC can also be
obtained, free of charge, by directing a request to Electro Rent
Corporation, 6060 Sepulveda Boulevard, Van Nuys, CA 91411,
Attention: Corporate Secretary.
Electro Rent Corporation and its directors and certain executive
officers may be deemed to be participants in the solicitation of
proxies from Electro Rent Corporation stockholders in respect of
the proposed transaction. Information about the directors and
executive officers of Electro Rent Corporation and their respective
interests in Electro Rent Corporation by security holdings or
otherwise is set forth in its proxy statement for the 2015 Annual
Meeting of Stockholders, which was filed with the SEC on September
9, 2015 and its Annual Report on Form 10-K for the year ended May
31, 2015, which was filed with the SEC on August 13, 2015.
Stockholders may obtain additional information regarding the
interests of Electro Rent Corporation and its directors and
executive officers in the Merger, which may be different than those
of Electro Rent Corporation’s stockholders generally, by reading
the proxy statement and other relevant documents regarding the
Merger, when filed with the SEC. Each of these documents is, or
will be, available as described above.
“Safe Harbor” Statement
Except for the historical statements and discussions in this
press release, the company’s statements above constitute
forward-looking statements within the meaning of section 21E of the
Securities Exchange Act of 1934. These forward-looking statements
reflect Electro Rent’s management’s views and expectations at this
time with respect to future events and financial performance, based
on currently available information. Forward looking statements in
this press release include statements regarding the completion of
the sale transaction to Platinum Equity. When used, the words
“anticipate”, “believe”, “expect” and “will” and other similar
expressions identify forward-looking statements. Forward-looking
statements are based on assumptions about future operations and
market conditions, and are subject to certain risks and
uncertainties. The company believes its assumptions are reasonable;
nonetheless, it is likely that at least some of these assumptions
will not come true. Accordingly, Electro Rent’s actual results will
differ from the outcomes contained in any forward-looking
statement, and those differences could be material. Factors that
could cause or contribute to these differences include, among
others, those risks and uncertainties discussed in the company’s
periodic reports on Form 10-K and 10-Q and in its other filings
with the Securities and Exchange Commission, including: general
macroeconomic conditions may not improve or may deteriorate; U.S.
federal government spending with respect to defense and other
research and development activities may not increase or may
decline; Electro Rent may not succeed in retaining its key sales or
other personnel; competition may cause the company to lower prices
and margins to effectively compete; and manufacturers of test and
measurement equipment may not be willing to enter reseller
arrangements with Electro Rent or those agreements may not succeed
to the level anticipated. Should one or more of the risks
discussed, or any other risks, materialize, or should one or more
of our underlying assumptions prove incorrect, the company’s actual
results may vary materially from those anticipated, estimated,
expected or projected. In light of the risks and uncertainties,
there can be no assurance that any forward-looking statement will
in fact prove to be correct. You should not put undue reliance on
these statements. Electro Rent undertakes no obligation to update
or revise any forward-looking statements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160531005366/en/
PondelWilkinson Inc.Roger Pondel/Laurie Berman,
310-279-5980pwinvestor@pondel.com
Electro Rent Corp. (MM) (NASDAQ:ELRC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Electro Rent Corp. (MM) (NASDAQ:ELRC)
Historical Stock Chart
From Jul 2023 to Jul 2024