By Lisa Kerner
Charlotte, N.C., March 6 - Meggitt-USA, Inc., a wholly owned U.S. subsidiary of Meggitt plc, entered into a definitive merger agreement to acquire K&F Industries Holdings, Inc. for $27.00 per share in cash in a transaction valued at $1.1 billion.
The offer price is roughly 54% more than K&F's $17.50 per share initial public offering in August 2005, according to a company news release.
Both companies' boards unanimously approved the merger.
K&F said it will hold a special meeting of stockholders in late April to approve the merger. Meggitt will seek shareholder approval at an extraordinary general meeting on March 27.
Under the agreement, Meggitt-USA will also assume $700 million of K&F's debt. Following the close of the transaction, which is expected in the second quarter of 2007, K&F will become a wholly owned subsidiary of Meggitt-USA.
The agreement also gives K&F until March 25 to actively solicit alternative acquisition proposals.
"After thorough and extensive analysis, our board of directors unanimously concluded that this transaction provides significant cash value to our stockholders and is in the best interests of our stockholders, customers and employees," K&F president and chief executive officer Kenneth M. Schwartz said in the release.
"We look forward to working with the Meggitt team to ensure a rapid and seamless transition."
K&F is based in White Plains, N.Y., and manufactures braking equipment for commercial transport, general aviation and military aircraft through its Aircraft Braking Systems Corp. subsidiary.
Christchurch, England-based Meggitt specializes in aerospace equipment, sensing and defense systems.
| Acquirer: | Meggitt-USA, Inc.
|
| Target: | K&F Industries Holdings, Inc.
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| Transaction value: | $1.1 billion
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| Payment per share: | $27.00
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| Announcement date: | March 6
|
| Expected closing: | Second quarter of 2007
|
| Stock price for target: | NYSE: KFI; $24.50 on March 5
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