American Securities has agreed to acquire GenTek Inc. (Nasdaq: GETI), a Parsippany, N.J.-based maker of inorganic chemical products and valve actuation systems and components for automotive and heavy-duty engines. The deal is valued at approximately $673 million (including $262m of assumed debt and liabilities), with GenTek stockholders to receive $38 per share (40.7% premium to Friday’s closing price). Moelis & Co. is serving as financial advisor to GenTek.
GenTek Inc. (NASDAQ: GETI), a leading provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines, announced today that it has entered into a definitive agreement to be acquired by ASP GT Acquisition Corp.(ASP), a wholly-owned subsidiary of investment funds managed by American Securities LLC, a private equity firm.
Under the terms of the merger agreement, ASP will commence a tender offer to purchase for cash all of the outstanding shares of GenTek common stock at a price of $38.00 per share. The transaction is valued at $673 million consisting of equity value of approximately $411 million plus the assumption of net debt and similar liabilities of approximately $262 million. The tender offer is expected to commence on or before October 9, 2009 and to expire on the 20th business day from and including the commencement date, unless extended in accordance with the terms of the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission.
Following completion of the tender offer, the parties will complete a second-step merger in which any remaining shares of GenTek will be converted into the right to receive the same price per share paid in the tender offer, and GenTek will cease to be a public company. Holders of GenTek’s Tranche C Warrants will have the right to receive a cash payment net of their per share exercise price and $38.00.
William E. Redmond, Jr., GenTek’s President and CEO, said, “Following consideration of a full range of strategic alternatives, we are pleased to have reached this agreement with American Securities which creates substantial value for our stockholders. This transaction represents a premium of 40.7% over GenTek’s closing share price of $27.00 on September 25, 2009, the last trading day before the merger agreement was signed. In addition, we believe that the transaction will have a positive outcome for our customers and employees.”
The Board of Directors of GenTek has unanimously approved the merger agreement and the transactions contemplated by the merger agreement, and has resolved to recommend that GenTek’s stockholders tender their shares in connection with the tender offer contemplated by the merger agreement. The closing of the tender offer by ASP is subject to certain conditions, including a minimum tender condition. In addition, upon closing of the tender offer and assuming the minimum tender condition is satisfied, ASP has been granted the option to purchase all authorized but unissued shares from GenTek that would enable ASP to hold one share more than 90% of GenTek’s outstanding common stock.
Moelis & Company is acting as financial advisor to GenTek and has delivered a fairness opinion to the GenTek Board. Latham & Watkins LLP is legal counsel to GenTek.
About GenTek Inc.
GenTek provides specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines. GenTek operates over 50 manufacturing facilities and technical centers and has approximately 1,100 employees. GenTek’s 2,000-plus customers include many of the world’s leading manufacturers of cars and trucks, and heavy equipment, in addition to global energy companies and water treatment facilities. Additional information about the Company is available at www.gentek-global.com.
About American Securities LLC
Headquartered in New York with an office in Shanghai, American Securities is a U.S. middle-market private equity firm that invests in market-leading companies in North America with annual revenues generally ranging between $100 million to $1 billion. Investments are funded from more than $6 billion of committed capital. The firm traces its roots to the family office founded in 1947 by William Rosenwald to invest and manage his share of his family’s Sears, Roebuck & Co. fortune. More information on American Securities can be found at www.american-securities.com.