New York private equity firm Greenbriar Equity Group LLC has agreed to acquire aerospace parts maker EDAC Technologies Corp. in a $104.1 million take-private stock deal and has secured the support of EDAC senior management, the manufacturer said Monday.
An affiliate of Greenbriar, GB Aero Engine LLC, will purchase EDAC for $17.75 per share in cash, a 19.8 percent premium to EDAC's average closing price for the 30 days ending Friday and 8 percent above its Friday closing price of $16.26. The purchase price is a 29.6 percent premium to EDAC's weighted average closing price over the past 90 trading days, EDAC said.
The deal requires majority shareholder approval. EDAC's board of directors and executive officers, who hold a combined 18.2 percent stake in the company, will vote their shares in favor of the deal.
EDAC's board unanimously approved the agreement and urged shareholders to vote in favor of the take-private bid. EDAC President and CEO Dominick Pagano said in a statement that the acquisition is in the best interests of the aerospace firm and its shareholders.
"Our agreement with Greenbriar represents an attractive valuation for our shareholders, and we look forward to closing the transaction expeditiously," Pagano said. "We believe that Greenbriar clearly understands our markets and that this transaction will allow EDAC to continue to focus on delivering high-quality products and services to our customers."
Shares of EDAC surged upward in heavy trading Monday as the market responded favorably to Greenbriar's acquisition bid. EDAC stock rose 7.56 percent to $17.68 by Monday afternoon, close to Greenbriar's offer price.
Under the terms of the agreement, Greenbriar will initiate a cash tender offer by March 26 to purchase all of the outstanding shares of EDAC’s common stock. If more than 50 percent of shareholders vote in favor of the deal, Greenbriar will acquire any outstanding shares in a second-step merger, also at $17.75 per share.
The deal, which is not subject to a financing condition, is expected to close by June if Greenbriar secures stakeholder approval. With management's sizable stake already in favor, Greenbriar only needs an additional 32 percent of EDAC shareholders to approval the sale.
EDAC is a diversified aerospace manufacturing company based in Farmington, Conn. The firm makes parts for commercial and military aircraft, heavy machinery and other industrial applications.
EDAC's core competencies include its in-house design and engineering capabilities, and the company has state-of-the-art manufacturing facilities.
Greenbriar, which has roughly $1.5 billion in assets under management, focuses exclusively on the global transportation industry. The Rye, N.Y.-based private equity house invests in companies in the aerospace and defense, automotive, freight and passenger transport, logistics and distribution sectors.
EDAC is represented by Robinson & Cole LLP partners Matthew Gaunci, Edward Samorajczyk and Christine E. Bromberg. Stifel Nicolaus & Co. is serving EDAC's financial adviser. Stifel is represented by Fried Frank Harris Shriver & Jacobson LLP, led by partners Philip Richter and Jerry Howe.
Greenbriar is represented by Kirkland & Ellis LLP, led by partners Shawn O'Hargan, Andrew Herman and Michael Movsovich.