Hardinge Inc. a international provider of advanced metal-cutting solutions and accessories, announced it has entered into a definitive merger agreement under which Hardinge will be acquired by an affiliate of Privet Fund Management LLC.
Under the terms of the agreement, Privet will acquire all shares of Hardinge common stock not currently owned by Privet for $18.50 in cash, for a total transaction value of approximately $245 million. The purchase price represents a premium of 12.1% over the closing price of $16.50 on November 1, 2017, the last unaffected trading day prior to the public announcement by Privet that it was evaluating a potential transaction to acquire Hardinge, and represents a 26.7% premium over the unaffected volume weighted average price for the three-month period ending on November 1, 2017. The purchase price also represents a premium of 8.3% over the closing price on February 12, 2018.
The agreement was negotiated and unanimously recommended to the Hardinge board of directors by the Strategic Alternatives Committee of the board, which consisted solely of independent directors and was formed to evaluate strategic alternatives, including this potential transaction. Affiliates of Privet currently own approximately 10.46% of the outstanding shares of Hardinge common stock and have agreed to vote their shares in favor of the proposed transaction.
Under the terms of the agreement, Privet will acquire all shares of Hardinge common stock not currently owned by Privet for $18.50 in cash, for a total transaction value of approximately $245 million.
The transaction is subject to approval of two-thirds of the shares of Hardinge common stock entitled to vote at the shareholder meeting. The transaction, which is not subject to a financing condition, is currently expected to close by the end of the second quarter of 2018, subject to shareholder approval and other customary closing conditions and regulatory approvals. Privet will finance the transaction through a combination of equity and debt. The debt financing is to be provided by White Oak Global Advisors, LLC.
Under the terms of the merger agreement, Hardinge may solicit acquisition proposals from third parties during a 45-day “go-shop” period that ends on March 28, 2018. It is not anticipated that any developments will be disclosed with regard to this process unless the Company’s Board of Directors makes a decision with respect to a potential superior proposal. The merger agreement provides Privet with a customary right to match a superior proposal. There is no assurance that this process will lead to any competing proposals or any superior proposal. Hardinge’s outreach during the go-shop period will be conducted by its financial advisor, BMO Capital Markets Corp., and any person requiring further information may contact Sean Sullivan at (212) 702-1123 or firstname.lastname@example.org.
Financial and Legal Advisors
BMO Capital Markets Corp. acted as financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to the Company’s Board of Directors. Baird acted as financial advisor and Bryan Cave LLP served as legal counsel to Privet in connection with the transaction.
Hardinge is a global designer and manufacturer of high precision, computer-controlled machine tool solutions developed for critical, hard-to-machine metal parts and of technologically advanced workholding accessories. With approximately two-thirds of its sales outside of North America, Hardinge serves the worldwide metal working market. Hardinge’s machine tool and accessory solutions can also be found in a broad base of industries to include aerospace, agricultural, automotive, construction, consumer products, defense, energy, medical, technology and transportation.
Hardinge applies its engineering design and manufacturing expertise in high performance machining centers, high-end cylindrical and jig grinding machines, SUPER-PRECISION® and precision CNC lathes and technologically advanced workholding accessories. Hardinge has manufacturing operations in China, France, Germany, India, Switzerland, Taiwan, the United Kingdom and the United States.
The Company regularly posts information on its website: www.hardinge.com
About Privet Fund Management LLC
Privet Fund Management LLC is a private investment firm focused on investing in and partnering with small capitalization companies. The firm has flexible, long-term capital with the ability to effectuate investments across all levels of the capital structure, including going-private transactions. Privet was founded in 2007 and is based in Atlanta, GA.