Johnson Electric Holdings Limited said it will make a cash tender offer, through wholly owned subsidiary Gatebrook Ltd., to acquire all of the outstanding shares of Saia-Burgess, a leading global supplier of stepper motors and sub-systems.
The offer price values Saia-Burgess (Murten, Switzerland ) at approximately CHF 695.9 million (U.S. $548.5 million). Johnson Electric (Hong Kong) expects to assume CHF 117.5 million net debt (U.S. $92.4 million) in connection with the offer. The offer is subject to regulatory approvals and customary conditions, including tender of at least 50 percent plus one of the fully diluted shares outstanding. The Saia-Burgess board of directors unanimously approved the acquisition proposal and will recommend to Saia-Burgess shareholders that they approve the transaction.
Management at Johnson Electric and Saia-Burgess are said to be in agreement about the growth synergies resulting from this transaction. Both companies have more than 50 percent of revenues derived from the automotive industry, with Johnson Electric's strength in DC motors complemented by Saia-Burgess' strength in stepper motors. The industrial segment represents 40 percent of Saia-Burgess' business portfolio, providing an opportunity to leverage Johnson Electric's sales reach into Asian markets. The industrial controls expertise of Saia-Burgess in combination with Johnson Electric's expertise in motor control is said to present another potential growth opportunity in the controls segment.
In a separate news release today, Saia-Burgess announced support for the Johnson Electric proposal and reiterated its rejection of a previous tender offer from Sumida Corporation.
"The strategic, industrial logic and culture alignment between Johnson Electric and our company is a compelling combination that will accelerate growth and assist in executing the Saia-Burgess strategic plan," said Saia-Burgess CEO Daniel Hirschi.
''Saia-Burgess is a very successful and well managed company, with a great track record of innovation and product excellence,'' said Patrick Wang, chairman and CEO of Johnson Electric. ''I envision that this acquisition will yield exciting innovations with high value to our customers."
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