Mill Road Capital Offers $2.75 Per Share to Acquire Huttig Building Products, Inc.
August 07 2020 - 7:54AM
Business Wire
Mill Road Capital is pleased to announce that it sent the
following letter to the Board of Directors of Huttig Building
Products, Inc. (NASDAQ GS: HBP) on August 6, 2020.
August 6, 2020
Delbert Tanner Chairman of the Board of Directors Huttig
Building Products, Inc. 555 Maryville University Drive, Suite 400
St. Louis, MO 63141
Re: Acquisition Proposal for Huttig Building Products,
Inc.
Dear Mr. Tanner:
Mill Road Capital Management LLC and its affiliated funds (“Mill
Road”) are pleased to present this proposal for the acquisition of
Huttig Building Products, Inc. (“Huttig” or the “Company”). As you
know, Mill Road is one of the largest shareholders of Huttig with
ownership of 8.1% of the Company‘s outstanding shares. Since making
our initial investment in Huttig in 2017, we have developed a deep
appreciation of the Company and its CEO, Jon Vrabely.
Given our experience in the public markets, we recognize the
inherent difficulties of creating value for shareholders as a
public, micro-cap company. There is very little sell-side analyst
coverage and minimal demand for micro-cap stocks. Institutional
investors avoid stocks like Huttig; it is difficult to accumulate a
position and any attempt to sell large blocks can materially
depress the share price for months. As a result, microcaps often
attract short-term shareholders who look for “quick wins” and
actively dissuade management from making sensible investments in
long-term value-creation. We hope that the Board of Directors finds
this proposal compelling for the Company’s shareholders and we look
forward to working with you in connection with a transaction.
Purchase Price Based on our review of publicly available
information to date, Mill Road proposes to acquire 100% of the
outstanding shares of the Company not already owned by Mill Road
for $2.75 per share which represents a premium of 67% over today’s
closing price. The purchase price would be payable in cash.
Due Diligence and Timing Given our familiarity with the
Company and significant experience executing going-private
transactions, we believe we can complete customary business,
accounting, and legal due diligence and negotiate definitive
documentation within 60 days.
Financing Mill Road anticipates the proposed transaction
will be funded through a combination of third party debt in
addition to equity capital provided by Mill Road. We have ample
equity capital to complete the transaction and are highly confident
in our ability to raise an appropriate amount of debt
financing.
Obligations and Approvals This proposal is not legally
binding. Binding legal obligations of Mill Road and the Company
will be created only through execution and delivery of definitive
agreements. Mill Road does not require any outside approvals to
complete a transaction (other than such approvals and/or
expirations of waiting periods as may be required under applicable
antitrust or other laws).
Overview of Mill Road Mill Road is a private investment
firm which has raised approximately $900 million in aggregate
committed equity capital. Our limited partners include a prominent
and highly respected group of state pension funds, foundations,
endowments and insurance companies. Our team is comprised of a core
group of former Blackstone professionals who have successfully
completed several dozen control transactions with a cumulative
transaction value of several billion dollars.
If you have any questions, please feel free to contact me
directly at (203) 987-3505. I look forward to discussing at your
earliest convenience.
Sincerely,
Mill Road Capital Management LLC
By: Justin C. Jacobs Management Committee Director
About Mill Road Capital
Mill Road Capital is a private investment firm focused on
investing in and partnering with publicly traded micro-cap
companies in the U.S. and Canada. The firm has flexible, long-term
capital with the ability to purchase shares in the open market, buy
large block positions from existing shareholders, provide capital
for growth or acquisition opportunities, or execute going-private
transactions. The firm has raised approximately $900 million of
aggregate equity capital commitments and has offices in Greenwich,
CT and the San Francisco Bay Area. More information can be found at
http://www.millroadcapital.com.
This communication is not an offer to purchase or a solicitation
of an offer to sell any securities. This communication relates to
an acquisition proposal which Mill Road Capital Management LLC
(“Mill Road Capital”) has made to acquire Huttig Building Products,
Inc. (“Huttig”). Any such transaction would only be made through
documents filed with the U.S. Securities and Exchange Commission
(“SEC”). No assurance can be given that any such transaction will
occur. If such transaction proceeds and such documents are filed
with the SEC, Huttig stockholders are urged to read such documents
carefully in their entirety if and when they become available, as
they will contain important information about the proposed
transaction. Huttig stockholders would be able to obtain such
documents (when available) free of charge at the SEC's web site,
www.sec.gov or from Mill Road Capital at www.millroadcapital.com or
at Mill Road Capital Management LLC, 382 Greenwich Avenue,
Greenwich, Connecticut 06830.
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version on businesswire.com: https://www.businesswire.com/news/home/20200807005214/en/
Mill Road Capital Justin Jacobs, (203) 987-3505
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