Industrial Distribution Group, Atlanta, GA, has two more suitors.
The company announced today that private equity firm Luther King Capital Management Corp., Fort Worth, TX, has made a competing bid for the distributor for $11.70 per share. The proposal represents a 13.6% premium to the $10.30 per share cash offer (or $113 million) made by Platinum Equity and accepted by IDG.
In a letter to Richard Seigel, chairman of the IDG board of directors, the firm said it currently owned 14.9% of IDG stock.
Another company -a strategic buyer known as Bidder D in IDG’s news release -has offered $11 per share. That company had participated in the original bidding phase after IDG announced it would consider being sold. IDG would not identify Bidder D.
IDG said it would look at whether either of the two proposals would result in a superior transaction relative to the previously announced proposed merger” with Platinum Equity. The board has determined each of the proposals is “credible” and could reasonably lead to a transaction. Both companies will conduct due diligence.
IDG agreed in February 2008 to be purchased by Platinum Equity. If IDG were to accept a higher bid from one of the two companies, Platinum would have the opportunity to increase its bid for the distributor. The current merger agreement with Platinum stands.
Platinum owns two other related distribution companies -Strategic Distribution Inc. and Ryerson Inc. Much of Strategic Distribution’s business, in particular, is focused on integrated supply; about 60 percent of IDG’s sales are in integrated supply, its fastest growing unit.
IDG recently reported sales for 2007 were $537.5 million, compared with $547.9 million in 2006, down 1.9%. Profit was $4.1 million, compared with $6.8 million last year.
