Transaction Provides a Significant Premium
to Shareholders and a Strong Partner to Support Future
Growth
Sparton Corporation (“Sparton” or the “Company”) (NYSE:SPA)
today announced that it has entered into a definitive agreement to
be acquired by an affiliate of Cerberus Capital Management, L.P.
(“Cerberus”), a global leader in alternative investing. Under the
terms of the agreement, Cerberus will acquire all outstanding
shares of Sparton’s common stock for $18.50 per share in cash.
The $18.50 per share consideration represents a premium of
approximately 41% over Sparton’s closing share price on December
11, 2018. The Sparton Board of Directors has unanimously approved
the agreement and recommends that the Company’s shareholders
approve the transaction.
“This transaction is the result of the significant time and
effort the Company has invested in its previously announced process
to explore strategic alternatives, including a potential
acquisition of Sparton,” said Joseph J. Hartnett, Interim President
and Chief Executive Officer of Sparton. “We are pleased to have
successfully concluded our process with a transaction that delivers
significant value to the shareholders of Sparton.”
Mr. Hartnett continued, “In addition to delivering immediate
value to our shareholders, this transaction provides Sparton with a
long-term partner that is focused on building upon our strong
platform. Cerberus is recognized as a leading investor in global
technology and manufacturing companies that brings significant
operational expertise, in addition to its financial capital and
acumen. Together, we will be able to capitalize on strategic growth
opportunities, while continuing to meet the needs of our customers
by delivering high-quality, innovative solutions and services.”
Tarek Ajouz, Managing Director of Cerberus, commented, “Sparton
has a proven track record as a leading manufacturer of complex
electromechanical devices for leading businesses and government
agencies around the world. With its industry-leading solutions and
strong customer relationships, we believe there is significant
opportunity to further expand the Company’s leadership position in
its markets. We look forward to partnering with Sparton’s talented
employees to serve its customers with best-in-class solutions,
build upon the foundation of excellent capabilities already in
place, and help Sparton achieve its full potential for growth.”
The transaction, which is subject to the receipt of Sparton
shareholder approval, clearance under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and other customary closing
conditions, is expected to close in the first calendar quarter of
2019. Additional details regarding the transaction will be set
forth in a proxy statement that will be sent by Sparton to its
shareholders in advance of the special meeting at which Sparton’s
shareholders will be asked to approve the transaction.
Debt financing for the transaction is being provided by accounts
managed by TCW Asset Management Company, LLC and MSD Partners,
L.P.
J.P. Morgan Securities LLC acted as financial advisor to
Cerberus and Lowenstein Sandler LLP, Kirkland & Ellis LLP, and
Blank Rome LLP acted as legal counsel to Cerberus.
Wells Fargo Securities, LLC and Raymond James & Associates,
Inc. acted as financial advisors to Sparton. Mayer Brown LLP acted
as legal counsel to Sparton.
About Sparton Corporation
Sparton Corporation (NYSE:SPA), now in its 119th year, is a
provider of complex and sophisticated electromechanical devices
with capabilities that include concept development, industrial
design, design and manufacturing engineering, production,
distribution, field service, and refurbishment. The primary markets
served are Medical & Biotechnology, Military & Aerospace,
and Industrial & Commercial. Headquartered in Schaumburg, IL,
Sparton currently has thirteen manufacturing locations and
engineering design centers worldwide. Sparton’s Web site may be
accessed at http://www.sparton.com/.
About Cerberus
Founded in 1992, Cerberus is a global leader in alternative
investing with over $35 billion in assets across complementary
credit, private equity, and real estate strategies. We invest
across the capital structure where our integrated investment
platforms and proprietary operating capabilities create an edge to
improve performance and drive long-term value. Our tenured teams
have experience working collaboratively across asset classes,
sectors, and geographies to seek strong risk-adjusted returns for
our investors. For more information about our people and platforms,
visit us at www.cerberus.com.
Safe Harbor and Fair Disclosure Statement
Safe Harbor statement under the Private Securities Litigation
Reform Act of 1995: To the extent any statements made in this
release contain information that is not historical, these
statements are essentially forward-looking and are subject to risks
and uncertainties, including the difficulty of predicting future
results, the regulatory environment, fluctuations in operating
results and other risks detailed from time to time in Sparton’s
filings with the Securities and Exchange Commission (“SEC”). The
matters discussed in this press release may also involve risks and
uncertainties concerning Sparton’s services described in Sparton’s
filings with the SEC. In particular, see the risk factors described
in Sparton’s most recent Form 10-K and Form 10-Q. Additional
factors may include the effect of the announcement of the merger
and related transactions on Sparton’s business relationships,
operating results and business generally; the occurrence of any
event, change or other circumstances that could give rise to the
termination of the merger agreement with Cerberus, and the risk
that the merger agreement with Cerberus may be terminated in
circumstances that require Sparton to pay a termination fee to
Cerberus; the outcome of any legal proceedings that may be
instituted against Sparton related to the merger agreement with
Cerberus; and the failure to satisfy conditions to completion of
the merger with Cerberus, including the receipt of Sparton
shareholder approval and clearance under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. Although we believe that these
forward-looking statements are based on reasonable assumptions,
there are many factors that could affect our actual financial
results or results of operations and could cause actual results to
differ materially from those in the forward-looking statements. All
future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by
the cautionary statements contained or referred to above. Except
for Sparton’s ongoing obligations to disclose material information
as required by the federal securities laws, Sparton does not have
any obligations or intention to release publicly any revisions to
any forward-looking statements to reflect events or circumstances
in the future or to reflect the occurrence of unanticipated
events.
Additional Information and Where to Find It
In connection with the proposed transaction, Sparton will file
with the SEC and mail or otherwise provide to its stockholders a
proxy statement regarding the proposed transaction. BEFORE MAKING
ANY VOTING DECISION, SPARTON’S STOCKHOLDERS ARE URGED TO READ THE
PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY
OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
MERGER OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
THE PARTIES TO THE PROPOSED TRANSACTION. Investors and security
holders may obtain a free copy of the proxy statement and other
documents that Sparton files with the SEC (when available) from the
SEC’s website at www.sec.gov and Sparton’s website at
www.Sparton.com.
Sparton and its directors, executive officers and employees may
be deemed, under SEC rules, to be participants in the solicitation
of proxies from Sparton’s stockholders with respect to the proposed
acquisition. Stockholders may obtain information regarding the
names, affiliations and interests of such individuals in Sparton’s
Annual Report on Form 10-K for the fiscal year ended July 1, 2018,
and its definitive proxy statement for the 2018 annual meeting of
shareholders. Additional information regarding the interests of
such individuals in the proposed acquisition of Sparton by Ultra
will be included in the proxy statement relating to such
acquisition when it is filed with the SEC. These documents may be
obtained free of charge from the SEC’s website at www.sec.gov and
Sparton’s website at www.Sparton.com
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version on businesswire.com: https://www.businesswire.com/news/home/20181212005203/en/
SpartonInvestors:IMS Investor RelationsJohn Nesbett /
Jennifer Belodeau,
203-972-9200jnesbett@institutionalms.comorCompany:Sparton
CorporationJoseph McCormack,
847-762-5812jmccormack@sparton.comorCerberusTorrey
LeroyCerberus Corporate
Communications646-885-3029tleroy@cerberuscapital.com
Sparton (NYSE:SPA)
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