Mueller Industries and Tecumseh Products Co. have entered into a definitive merger agreement under which an affiliate of Mueller Industries and Atlas Holdings will acquire Tecumseh in a transaction valued at approximately $123 million, including the assumption of net debt. The offer price of $5.00 per share in cash reflects a 155% premium based on Tecumseh's closing price of $1.96 per share on August 4, 2015.
Memphis, Tenn.-based Mueller Industries, founded in 1915, produces tube fittings, valves, and industrial materials for HVAC, plumbing and other industries. Compressor manufacturer Tecumseh, with headquarters in Ann Arbor, Mich., will become a privately-held company following the acquisition by Mueller Industries.
The proposed transaction would bring together Tecumseh, an iconic brand with a global footprint and market-leading positions, with new owners, Mueller Industries and Atlas Holdings, who will contribute market and operational expertise, as well as capital.
"We look forward to working with Mueller Industries and Atlas Holdings to help us achieve continued growth as we provide our customers with innovative, best-in-class products and outstanding service and support," stated Harold Karp, President and Chief Executive Officer of Tecumseh.
Transaction Overview
Under the terms of the merger agreement, an affiliate of Mueller Industries and Atlas Holdings will commence a tender offer for all the outstanding common stock shares of Tecumseh for $5.00 per share in cash, a 155% premium based on Tecumseh's closing price of $1.96 per share on August 4, 2015. Tecumseh's Board of Directors has unanimously approved the merger agreement.
Post Transaction Positioning
Tecumseh will remain a standalone business with its headquarters unchanged at the close of the proposed transaction. In addition, Tecumseh will continue to operate its global technology centers and manufacturing facilities in North America, South America, Europe and Asia. Tecumseh will become a privately held company and will be delisted from the NASDAQ Stock Market, which sources report will strengthen its ability to focus on growing the business, launching new products and enhancing customer service levels. Tecumseh's senior management is expected to remain in place following the acquisition.
Citi is serving as the Company's financial advisor, while Honigman Miller Schwartz and Cohn LLP is serving as its legal advisor. Willkie Farr & Gallagher LLP is serving as legal advisor to Mueller Industries and Atlas Holdings.