Vista, Calif. – Charlesbank
Capital Partners, a middle-market private equity investment firm, has reached a
definitive agreement to acquire DEI Holdings, parent of multiple car
electronics brands and home-speaker makers Polk Audio and Definitive
Technologies.
The cash transaction is valued at
around $285 million, including the assumption of debt. The transaction will be
financed through a combination of equity and debt.
The agreement permits DEI Holdings
to solicit, receive, and enter into negotiations for a purchase by other
companies for a 35-day “go-shop” period from the date of the merger agreement.
Charlesbank, however, gets the right to match any competing proposal. If a better
offer isn’t made, the transaction is expected to close in late June 2011, Charlesbank said.
If the transaction is completed, DEI
Holdings will remain headquartered in Vista and
maintain its offices in Maryland and Canada. The company will continue to be led by its
existing management team, including president/CEO James
Minarik and executive VP/CFO Kevin Duffy.
Under the terms of the agreement,
holders of the outstanding DEI common shares will get around $3.79-$3.81 per share in cash, reflecting a premium of about
142 percent of DEI’s closing share price on May 12.
Charlesbank
Capital Partners is a middle-market private equity investment firm managing
more than $2 billion of capital. The company’s
website said it is “highly experienced in identifying opportunities for
creating value.”
Last year, Charlesbank and
H.I.G. Capital brought TLC Vision, the eye care services provider, out of
Chapter 11, and
after five
months of restructuring, made it a private
company “with its balance
sheet deleveraged, debt repaid in full and significant capital made available
for future expansion,” Charlesbank said.
Charlesbank was also
involved in the 1999 purchase of
wholesale
replacement-tire distributor
American Tire Distributors,
whose family
wanted to sell the business for estate-planning services. In March 2005, Charlesbank sold ATD to Investcorp for $324 million, representing a 4.1x return on
investment.
