TESSCO Shareholders to Receive $9 Per Share in
Cash in $161.4 Million Acquisition
TESSCO TECHNOLOGIES INCORPORATED (NASDAQ: TESS),
(“Tessco” or the “Company”), today announced that the Company has
entered into a definitive merger agreement with entities affiliated
with Lee Equity Partners and Twin Point Capital, which also own
Alliance Corporation (“Alliance”), a value-added distributor of
equipment for the wireless industry, and GetWireless, LLC
(“GetWireless”), a value-added distributor of cellular solutions
that connect the Internet of Things (IoT). Under the terms of the
merger agreement, all outstanding shares of Company common stock
will be acquired for $9.00 in cash, resulting in a Company
enterprise value of approximately $161.4 million.
The merger, which has been unanimously approved by Tessco’s
board of directors, reflects a premium of approximately 91% to the
closing price of the last trading day prior to the date of this
announcement and a premium of approximately 97% to Tessco’s 30-day
volume-weighted average stock price as of April 11, 2023.
The merger is expected to close in the third calendar quarter of
2023, subject to the approval of Tessco’s shareholders and the
satisfaction of customary closing conditions.
Following the closing of the transaction, Tessco will maintain
its facilities in Hunt Valley and Timonium, Maryland and in Reno,
Nevada, as well as broaden its facility footprint, product
offering, and value-added capabilities by partnering with Alliance
and GetWireless to create a leading value-added telecommunications
distributor in North America.
“This deal is a win for Tessco shareholders and our customers,”
said Sandip Mukerjee, Tessco’s President and Chief Executive
Officer. “The transaction price and premium reflect the success of
our considerable turnaround efforts over the past three years, as
well as Tessco’s current growth trajectory. Moreover, our customers
will benefit from a greater breadth of products and service options
as we team with two companies that are true leaders in serving the
wireless industry, and that share our commitment to innovation and
customer service.”
“We are excited about the prospects for partnering with Tessco,
given its first-rate management team, technical competency, strong
supplier relationships, and fantastic partnerships in the carrier
and value-added reseller and integrator markets,” said Ron Moss,
CEO of Alliance. “We look forward to continuing to serve the
growing and increasingly complex needs of the wireless
telecommunications industry and providing our customers with a
comprehensive portfolio of the highest quality products and
services.”
William Blair & Company L.L.C. is serving as Tessco’s
exclusive financial advisor, and Ballard Spahr LLP is acting as the
Company's legal counsel. Weil, Gotshal & Manges LLP, DLA, and
Harter Secrest & Emery LLP are serving as legal counsel to Lee
Equity Partners and Twin Point Capital.
About TESSCO Technologies Incorporated (NASDAQ: TESS)
TESSCO Technologies, Inc. (NASDAQ: TESS) is a value-added
technology distributor, manufacturer, and solutions provider
serving commercial customers in the wireless infrastructure
ecosystem. The Company was founded more than 40 years ago with a
commitment to deliver industry-leading products, knowledge,
solutions, and customer service. Tessco supplies products to the
industry’s top manufacturers in mobile communications, Wi-Fi,
Internet of Things (“IoT”), wireless backhaul, and more. Tessco is
a single source for outstanding customer experience, expert
knowledge, and complete end-to-end solutions for the wireless
industry. For more information, visit www.tessco.com.
About Alliance Corporation
Alliance Corporation distributes equipment for wireless network
infrastructure, in-building signal enhancement solutions, cellular
broadband systems, next generation 5G networks, fixed wireless and
private enterprise networks, as well as cellular solutions that
connect the Internet of Things. Alliance provides pre- and
post-sale technical support, engineering, radio configuration and
training services. Alliance serves telecommunication carriers,
fixed wireless broadband service providers, OEMs, systems
integrators, resellers, and contractors in education, enterprise,
federal government, military, healthcare, industrial, municipal
government, oil and gas, mining, public safety, security,
utilities, and transportation industries. Visit
www.alliancecorporation.ca.
Alliance merged with GetWireless, LLC, a value-added distributor
of cellular solutions that connect the Internet of Things (IoT).
Given its strategic portfolio of embedded modules, end-device
modems, intelligent gateways, and cellular boosters, GetWireless
supplies the most advantageous cellular solutions for a broad array
of IoT applications. GetWireless enables mobile network operators,
value-added resellers, integrators, and OEMs across a wide range of
enterprise, industrial, government, and SMB applications. Visit
www.getwirelessllc.com.
About Lee Equity Partners
Lee Equity Partners, LLC is a New York-based private equity firm
that partners with successful management teams to build companies
with strong growth potential. Lee Equity targets equity investments
of $50 million to $150 million in middle-market control buyouts and
growth capital financings in companies with enterprise values of
$100 million to $500 million that are located primarily in North
America. The firm invests within three distinct sectors, healthcare
services, financial services, and business services, where the team
has developed deep relationships over decades. For more
information, visit www.LeeEquity.com.
About Twin Point Capital
Twin Point Capital is a New York-based principal investment
firm, which partners with outstanding management teams to build
market leading companies. Twin Point’s portfolio includes
investments in the communications, technology and
technology-enabled service industries.
Important Additional Information and Where to Find It
This communication relates to the proposed merger involving
Tessco Technologies Incorporated. In connection with the proposed
merger, Tessco plans to file with the Securities and Exchange
Commission (the “SEC”) preliminary and definitive proxy statements
and other relevant documents. This communication is not a
substitute for the proxy statement or any other document that
Tessco may file with the SEC or send to its shareholders in
connection with the proposed merger. Before making any voting
decision, shareholders of Tessco are urged to read all relevant
documents filed with the SEC, including the proxy statement, when
they become available because they will contain important
information about the proposed merger. Investors and security
holders will be able to obtain the proxy statement and other
documents filed by Tessco with the SEC (when available) free of
charge at the SEC’s website, www.sec.gov, or from Tessco at the
investor relations page of its website,
ir.tessco.com/overview/default.aspx. These documents are not
currently available.
Participants in the Solicitation
Tessco and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the holders of
Tessco common stock in respect of the proposed merger. Information
about the directors and executive officers of Tessco is set forth
in Tessco’s Annual Report on Form 10-K for the year ended March 27,
2022, filed with the SEC on May 26, 2022 and proxy statement for
its 2022 Annual Meeting of Shareholders, filed with the SEC on June
17, 2022. Additional information regarding potential participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be
contained in the proxy statement and other relevant documents to be
filed by Tessco with the SEC in respect of the proposed merger.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements are based on current expectations and
beliefs of Tessco’s management and Alliance’s management and are
subject to uncertainty and changes in circumstances. Actual results
may vary materially from those expressed or implied by the
forward-looking statements herein due to risks and uncertainties.
These risks and uncertainties include, but are not limited to,
those associated with: the parties’ ability to meet expectations
regarding the timing and completion of the merger; the occurrence
of any event, change or other circumstance that would give rise to
the termination of the merger agreement and the fact that certain
terminations of the merger agreement require the Company to pay a
termination fee of $4 million; the failure to satisfy each of the
conditions to the consummation of the merger; the disruption of
management’s attention from ongoing business operations due to the
merger; the effect of the announcement of the merger on Tessco’s
relationships with its customers, as well as its operating results
and business generally; the outcome of any legal proceedings
related to the merger; retention of employees of Tessco following
the announcement of the merger; and the fact that Tessco’s stock
price may decline significantly if the merger is not completed.
The above discussion should not be construed as exhaustive and
should be read in conjunction with our other disclosures, including
but not limited to the risk factors and other factors described in
our Annual Report on Form 10-K for the year ended March 27, 2022,
including Part I, Item 1A, "Risk Factors" therein, and our
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other securities filings with the SEC that are available at the
SEC's website at www.sec.gov. New risks emerge from time to time.
It is not possible for our management to predict all risks.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements. In
addition, neither we nor any other person assumes responsibility
for the accuracy and completeness of any of these forward-looking
statements. Any forward-looking statement made by us in this press
release speaks only as of the date on which it is made. We disclaim
any duty to update any of these forward-looking statements after
the date of this press release to confirm these statements to
actual results or revised expectations, except as may be required
by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20230412005273/en/
TESSCO Technologies Incorporated Aric Spitulnik Chief Financial
Officer 410-229-1419 spitulnik@tessco.com
David Calusdian Sharon Merrill Associates, Inc. 617-542-5300
TESS@investorrelations.com
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