After a sometimes contentious takeover bid and the departure of a CEO, Coleman Cable, Inc., Waukegan, Ill., and Technology Research Corp., Clearwater, Fla., at last announced a definitive merger agreement that will add significant breadth in power management and battery backup systems to a further expansion of Coleman's operations beyond wire and cable.
Under the terms of the agreement, which have been approved by both companies' boards, Coleman will acquire all outstanding shares of TRC for $7.20 per share in cash in a transaction valued at approximately $51.5 million on a fully diluted basis. The cash consideration represents a premium of approximately 84.6 percent to TRC's closing share price on January 14, 2011, the last trading day before TRC announced Coleman's interest in a deal. (Coleman's original offer of $5.50 per share was already a 46 percent premium over TRC's stock price at the time.) The transaction will be funded with Coleman's cash on hand and existing borrowing facilities, and is not subject to any financing condition.
“TRC is an exceptional company with markets and products that are well-aligned with our business,” said Gary Yetman, Coleman's chairman, president and CEO. “With the addition of TRC's power management and storage business, we will further diversify our portfolio to provide a wider range of electrical solutions to benefit our customers. We firmly believe this transaction will deliver meaningful value to Coleman shareholders while providing additional opportunities for employees of the combined company.”
The agreement's completion came after TRC's CEO, Owen Farren, who had led the TRC board to adopt a “poison pill” shareholder rights provision following the Coleman offer, abruptly left the company in February.
Yetman of Coleman appeared to make a point of consigning any resulting acrimony to the past with his statement in Coleman's press release: “We have enjoyed working with the TRC management team to reach agreement on a mutually beneficial transaction and anticipate a seamless integration for all of the combined company's stakeholders,” said Yetman.
Coleman further expanded in the lighting business as well, announcing a deal to acquire The Designer's Edge, Bellevue, Wash., a manufacturer and distributor of specialty lighting products. This deal, worth about $10.9 million in cash, expands Coleman's product portfolio across a wide range of lighting product categories, including industrial, work and utility, as well as products for security and landscape applications, said a Coleman release. These product offerings will complement CCI's existing portfolio of lighting and lighting-related products, including its portable lighting products, lighting-related timers and controls and the Moonrays line of garden lighting and products. The Designers Edge had 2010 sales of more than $210 million.
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