Kaman Corporation, Bloomfield, CT, reported that it received a letter on Jun. 28 from Kaman family representatives indicating that the family intends to terminate the recapitalization agreement to complete what they represent is a "qualifying alternative transaction." The company had previously announced on Jun. 7 a recapitalization agreement between Kaman Corporation and members of the Kaman family. The alternative transaction involves purchase of all of the approximately 668,000 outstanding shares of the Company's Class B common stock for $55.00 per share in cash.
Kaman's board of directors has the right to terminate a "qualifying alternative transaction" by approving a "substitute recapitalization proposal" in accordance with the recapitalization agreement. The board of directors will have ten business days (or if an arbitration were to be commenced until five business days following completion of the arbitration) to determine whether to approve and propose such a "substitute recapitalization proposal" to shareholders. In that regard, the company will have five business days within which to determine whether to commence an arbitration. Pursuant to the recapitalization agreement, the Kaman family has agreed to support any "substitute recapitalization proposal" in the event one is approved by the board of directors.
If approved by the board and proposed to shareholders, a "substitute recapitalization proposal" would amend the existing recapitalization proposal to increase the number of voting common shares into which each share of Class B common stock would be converted and would need to provide for a minimum deemed value per Class B common share of at least $0.65 greater than the $55.00 per share amount offered in the qualifying alternative transaction. For this purpose, one share of the voting stock would be valued at $15.54, which was the average closing price for the Class A common stock over the ten trading day period prior to the recapitalization agreement being signed. Accordingly, a substitute recapitalization proposal would need to have an exchange ratio of at least 3.58 voting common shares for each share of Class B common stock and a part stock/part cash alternative under which holders would have the right to elect instead to receive for each of their shares of Class B common stock at least 1.84 voting common shares and $27.10 in cash.
Additional details of the recapitalization agreement can be found by reviewing the recapitalization agreement, which was filed as Exhibit 99.1 to the company's current report on Form 8-K filed on June 7, 2005. Additional details of the alternative transaction proposed by the Kaman family can be found by reviewing the letter from the Kaman family's representatives and its attachments, which is being filed as Exhibit 99.1 to the company's current report on Form 8-K filed on June 29, 2005.
Based in Bloomfield, Conn., Kaman Corporation conducts business in the aerospace, industrial distribution and music markets. Kaman operates its aerospace business through its Aerostructures, Fuzing, and Helicopters divisions and its Kamatics subsidiary providing subcontract aerostructure manufacturing for military and commercial aircraft, missile and bomb fuzing products, SH-2G and K-MAX helicopters, and proprietary aircraft bearings and products. Principal aerospace facilities are located in Connecticut, Florida and Kansas. Kaman is the third largest North American distributor of power transmission, motion control, material handling and electrical components and a wide range of bearings offered to a customer base of more than 50,000 customers representing a highly diversified cross-section of North American industry, with principal facilities in Alabama, California, Connecticut, New York, Indiana, Kentucky and Utah. Kaman is also the largest independent distributor of musical instruments and accessories, offering more than 17,500 products for amateurs and professionals, with principal facilities in Arizona, Connecticut, California, New Jersey and Tennessee.