Buyout shop Vector Capital said Monday that it would buy publicly traded Gerber Scientific Inc. for $281.8 million. At $11 per share, the cash consideration represents a 24% premium to Gerber’s average closing price over the last 30 days. Fortress Credit Corporation is providing debt financing. Based in Tolland, Conn., Gerber provides automated manufacturing systems for the sign making, specialty graphics, packaging, apparel and industrial industries.
Gerber Scientific, Inc. (NYSE: GRB) (the “Company” or “Gerber Scientific”), and Vector Capital Corporation (“Vector”) today announced that they have entered into a definitive merger agreement under which funds affiliated with Vector will acquire the Company.
Under the terms of the merger agreement, the shareholders of the Company will receive $11.00 per share in cash, or approximately $281.8 million in total. The cash consideration represents a 24% premium to the Company’s average closing share price over the last 30 days and a 35% premium to the closing share price on Friday, June 10, 2011. In addition to the cash payment, each shareholder of the Company will receive for each share they own a non-transferable right to receive contingent cash payments at future times, if recoveries are made pursuant to certain litigation claims in respect of U.S. Patent 5,537,135 (a computerized “print to cut” technology patent).
After a thorough assessment, the Board of Directors of the Company (the “Board”) unanimously adopted the merger agreement.
“This merger is a very positive development for our shareholders, employees, customers and business partners,” said Donald P. Aiken, Gerber Scientific Chairman of the Board. “We are very excited to open a new chapter in our 60+ year heritage as a technology innovator through our new partnership with Vector, a leading technology investment firm. Vector has a proven track record as a value-added partner to its portfolio companies, and we believe that their technology expertise and financial resources will enable us to continue to provide superior products and service to our customers worldwide, while growing our global footprint.”
Amish Mehta, a Partner at Vector, added, “We are very excited to partner with Gerber Scientific’s talented team to continue to grow their leading technology business. The business that Gerber Scientific’s team has built, coupled with its great product offerings, makes it an ideal fit for our portfolio of cutting edge technology companies. We believe our support, combined with Gerber Scientific’s product strategy, employee talent and strong customer relationships will enable Gerber Scientific to further define itself as a leading player in the Apparel and Industrial market segment.”
The merger agreement permits the Board to solicit, receive, evaluate and enter into negotiations with respect to alternative proposals through July 25, 2011. The Board, with the assistance of its advisors, will actively solicit alternative proposals during this period. There can be no assurance that this process will result in a superior offer. If there is no superior offer, the transaction is expected to close in the second half of calendar 2011, subject to customary approvals and closing conditions. Completion of the transaction also requires approval by a majority of the outstanding shares of the Company.
Vector has secured committed debt financing from Fortress Credit Corporation. However, financing is not a condition to the closing of the transaction.
RA Capital Advisors is acting as financial advisor and Cravath, Swaine & Moore LLP is acting as legal advisor to the Board. Davis Polk & Wardwell LLP is acting as legal advisor to Vector.
About Gerber Scientific, Inc.
Gerber Scientific, Inc. (http://www.gerberscientific.com) is a leading international supplier of sophisticated automated manufacturing systems for the sign making, specialty graphics, packaging, apparel and industrial industries. Headquartered in Tolland, Connecticut, the Company operates through three primary businesses: Gerber Scientific Products, Spandex and Gerber Technology.
About Vector Capital
With over $2 billion of capital, Vector Capital is a leading global private equity firm specializing in spinouts, buyouts and recapitalizations of established technology businesses. Vector identifies and pursues these complex investments in both the private and public markets. Vector actively partners with management teams to devise and execute new financial and business strategies that materially improve the competitive standing of these businesses and enhance their value for employees, customers and shareholders. Among Vector’s notable investments are Aladdin Knowledge Systems, Certara, Corel, LANDesk, Precise Software, Printronix, RAE Systems, Register.com, SafeNet, Savi Technology, Trafficmaster, WatchGuard Technologies, and WinZip. For more information, visit www.vectorcapital.com.
The Company plans to file with the Securities and Exchange Commission (the “SEC”) and mail to its shareholders a proxy statement regarding the proposed acquisition of the Company by Vector. Investors and security holders are urged to read the proxy statement relating to such acquisition and any other relevant documents filed with the SEC when they become available because they will contain important information. Investors and security holders may obtain a free copy of the proxy statement and other documents that the Company files with the SEC (when available) from the SEC’s website at www.sec.gov and the Company’s website at www.gerberscientific.com. In addition, the proxy statement and other documents filed by the Company with the SEC (when available) may be obtained from the Company free of charge by directing a request to Gerber Scientific, Inc., c/o Investor Relations, 24 Industrial Park Road West, Tolland, CT 06084 USA, telephone: 860-870-2890.