NEW YORK (AP) - Aerospace and automotive parts maker Sequa Corp. said Monday it agreed to a $175-per-share takeover bid from private equity firm Carlyle Group, representing a 54 percent premium to the closing price of Sequa's Class A and B shares on Friday.
Based on the company's 11.4 million Class A and B shares as of April 30, the transaction is valued at $1.99 billion. In a statement Monday, the companies said the total deal is valued at $2.7 billion.
Carlyle Managing Director Peter Clare said in a statement that Sequa CEO Martin Weinstein and the rest of the company's senior management team will remain with Sequa. The company's board has unanimously approved the deal and is recommending shareholders vote in favor of the transaction.
The executors of the estate of Sequa founder Norman E. Alexander and certain entities owned or controlled by them, which hold about 54 percent of Sequa's voting power, have agreed to vote all of their shares in favor of the transaction. The estate expects all proceeds received will fund a charitable trust.
Under terms of the agreement, Sequa may solicit acquisition proposals from third parties until Aug. 23. The transaction is expected to close in the fourth quarter of 2007, subject to the approval of Sequa stockholders and antitrust clearance.
The companies said the acquisition will be financed through a combination of equity contributed by investment funds affiliated with Carlyle and external debt financing provided by Lehman Brothers, Citigroup and JP Morgan. The deal's closing isn't contingent upon Carlyle obtaining financing.
Evercore Group LLC is acting as financial adviser to Sequa, and Cahill Gordon & Reindel is acting as legal adviser. Lehman Brothers, Citigroup and JPMorgan are advising Carlyle, and Latham & Watkins is acting as Carlyle's legal adviser.
Sequa reported fiscal 2006 profit of $65.6 million on revenue of $2.18 billion. Chromalloy Gas Turbine, Sequa's largest business unit, provides aftermarket services to the airline industry, supplying advanced repairs for jet engine parts.