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.