Quantcast

SLIDESHOW

ACG New York Women of Leadership - Entrepreneur Series
Barbara Bradley Baekgaard, founder of Vera Bradley (Nasdaq: VRA), is the latest in a series of entrepreneurs highlighted at ACG New York Women of Leadership events. Photo credit: Robert Blumenfeld

Watercooler

GTCR, Hormel, the Riverside Co-CEOs and Others Win M&A Mid-Market Awards
Amid a slow and challenging year for dealmaking, the winners of Mergers & Acquisitions’ 7th Annual M&A Mid-Market Awards outpaced the competition to grow, innovate and lead the middle market

Roundtable

Financial Services Companies Heat Up M&A Market
Speakers from Flexpoint Ford, Genstar Capital, Baird Capital, Madison Capital Funding and Katten Muchin Rosenman discuss the various factors playing a role in M&A activity within the financial services space

Expert's Corner

Pursuing Pharma Manufacturing
The fragmented pharmaceutical manufacturing industry provides plenty of opportunities for private equity investors, says JLL Partners founder Paul Levy

Francisco Picks Up EF Johnson

The taking private, which offers a small premium to the listed shares, helps solve liquidity issues for the target.

Francisco Partners agreed to acquire EF Johnson Technologies. The firm settled on a price of $1.05 a share for the Nasdaq-listed company, which designs and manufacturers wireless communications systems and products. The valuation represents just a slight premium to EF Johnson's $1.03 share price as of last Friday's close.

The deal comes as the company has struggled in recent years. For the full-year 2009, EF Johnson saw its sales slump to $92 million, down from $126 million in 2008, although the company was able to narrow its Ebitda loss from $16 million to $7 million year over year.

EF Johnson brought in Raymond James to help oversee a search for strategic alternatives in March after the company tripped certain financial covenants in the fourth quarter under its loan agreement with Bank of America. The company's $15 million revolver was due to expire June 30th.

Based on the 26.5 million shares outstanding, the sale to Francisco, at $1.05 a share, is valued at $27.8 million.

Houlihan Lokey provided a fairness opinion.

According to a proxy statement, EF Johnson and its board are not permitted to solicit alternative bids. The agreement includes a $1 million termination fee and a $2 million reverse termination fee should Francisco Partners walk.

While the company has faced headwinds in the form of weaker municipal budgets, Mike Jalbert, EF Johnson president and CEO, said in a March conference call that the goal for the year is to solve the company's liquidity issues. He alluded to the possibility of going private, citing that the company would be profitable in 2010, but given the costs of being public, it would take the company "into 2011," before those costs were absorbed.

Preceding the announcement of the deal, the company amended its debt agreement with BofA to extend the maturities of the loan to August 31, 2010, to help facilitate the sale. BofA also agreed to waive certain covenants on a one-time basis.

Francisco Partners is investing out its second fund, a 2006-vintage $2.3 billion vehicle. The acquisition of EF Johnson will likely be among the last investments to come out of the fund, as the firm has already started fundraising a follow-up vehicle, Francisco Partners III.

The firm has been particularly active in 2010. Francisco, so far this year, has lined up investments in T-System, QuadraMed, Cybit and Discrete Wireless and secured exits for RedPrairie and Numonyx.

Calls to EF Johnson and Francisco Partners were not immediately returned by press time.

 

For more information on related topics, visit the following: