By: E&P Staff
Miami-based Quipp Inc., parent of newspaper post-press systems supplier Quipp Systems Inc., announced today that it signed an agreement by which it will be acquired by Illinois Tool Works Inc., a diversified manufacturer of engineered components and industrial systems and consumables, headquartered in Glenview, Ill., with more than 825 business units in 52 countries.
Quipp’s products are widely installed in the Americas. In 1995, Quipp bought Walpole, Mass.-based inserter remanufacturer and controls supplier Newstec for $4.2 million. Newstec became a Quipp subsidiary and consolidated operations in Miami.
The deal specifies a per-share cash price between $4.30 and $5.65, with the definitive price to be based on adjustments relating to the amount of Quipp’s cash and cash equivalents and specified indebtedness before the transaction is completed.
Based on the 1.5 million Quipp shares outstanding at the end of September, the acquisition will cost in the range of $6.5 million to $8.5 million._
Quipp will not proceed with the transaction if the adjusted price would be less than $4.30 per share, which Quipp believes is unlikely. Quipp’s Board of Directors unanimously approved the transaction. It is anticipated that the transaction will be completed in the spring or early summer of 2008.
Subsequent to execution of the merger agreement, the directors and another shareholder of Quipp, who own approximately 12% of its outstanding common stock, agreed to vote their shares of Quipp common stock in favor of the merger.
“After a rigorous strategic alternatives evaluation, we strongly believe that our agreement with Illinois Tool Works represents the best alternative for Quipp and its shareholders,” Quipp President and CEO Michael S. Kady said in a statedment. Besides offering a “meaningful premium over the current trading price,” Kady continued, the merger “will enable Quipp’s employees to become part of a much larger and financially stronger organization. In addition, it should provide excellent cost saving opportunities, including savings resulting from Quipp no longer being subject to the burdens of operating as a stand-alone public company, which have become very expensive over the past few years.”