The equity of The L.S. Starrett Company (NYSE: SCX) has surged notably in the current trading session, marking an impressive increase of 58.87% to reach $15.76 per share at the latest check. This upward trajectory in Starrett’s stock value follows the announcement of a merger deal.
Today, Starrett (SCX) has disclosed its entry into a definitive merger agreement for a go-private transaction with an affiliate of MiddleGround Capital. The merger entails an all-cash transaction valued at $16.19 per share, indicating an approximate 63% premium over the closing stock price of the Company as of March 8, 2024, which was the last trading day before the transaction announcement.
The agreement with MiddleGround is set to deliver a substantial premium cash value to SCX’s shareholders. After conducting an extensive outreach to potential partners, Starrett’s Board of Directors concluded that MiddleGround, with its profound expertise in the manufacturing sector, is the ideal collaborator for the company.
Transitioning into a private entity will afford SCX enhanced financial and operational flexibility, facilitating the continued delivery of top-notch services and products across various markets while upholding Starrett’s esteemed legacy among its employees, communities, and stakeholders.
MiddleGround’s decision to unite with Starrett stems from its long-standing admiration for the company, nurtured through years of observation within the public markets. The majority of MiddleGround’s Operations team members have gained familiarity with Starrett products throughout their manufacturing careers, and the merger presents an opportunity to further position MiddleGround at the forefront of innovation, advanced manufacturing, and reshoring initiatives.
The proposed transaction has received approval from Starrett’s Board of Directors. MiddleGround intends to finance the deal through a blend of cash from MiddleGround Partners III, L.P. and committed financing, free from any contingencies. The transaction is slated to conclude by mid-2024, subject to requisite approval from Starrett’s shareholders and fulfillment of other closing conditions.
Upon finalization, Starrett will operate as a wholly owned subsidiary of MiddleGround, and SCX Class A common stock will cease to be listed on any public exchange.
