Charlesbank Ups Bid To Buy Directed Electronics

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Vista, Calif. - Directed Electronics shareholders will be getting more money from the company's acquisition than they originally thought.

 Directed's board accepted a higher bid from Charlesbank Capital Partners, the middle-market private equity investment firm that

agreed in May

to buy the maker of car security, car audio and home audio equipment for $3.79 to $3.80 per share in cash. The higher bid was made after Directed received a written non-binding proposal last week from Gibson Guitar, which offered around $4.47 per share in cash, financed totally through debt financing. Charlesbank matched Gibson's bid by upping its per-share proposal by more than 17 percent to around $4.45 to $4.47 per share in cash, contingent on Directed's shareholders approving the deal by Monday, June 20, at 5 p.m. ET.

DEI shareholders are meeting today, June 20, at 1 p.m. ET to vote on the acquisition by Charlesbank.


original Charlesbank deal

was valued at around $285 million, including the assumption of $183 million in debt. It was to be financed through a combination of $115 million in equity from Charlesbank and $205 million in a senior secured credit facility, which consists of a $175 term loan and $30 million in revolving credit.

Directed said it went with Charlesbank's counter offer because the "Gibson proposal presented a high degree of uncertainty and execution risk when compared to the likelihood of completing a transaction with Charlesbank on an expedited basis." Gibson still had to conduct due diligence, Directed explained, and "Gibson's proposed debt financing was subject to numerous conditions outside the control of DEI Holdings."

 The original acquisition proposal by Charlesbank is the subject of two shareholder suits filed against DEI and Charlesbank in a California Superior Court in San Diego, alleging that DEI failed to maximize shareholder value.


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