Standex International Corp., a diversified global manufacturing company operating in five broad segments, has recently announced the termination of its merger agreement with Torotel, Inc. The multi-industry manufacturer has recently exercised its right to terminate the agreement that was announced in December 2019 since the closing conditions were not satisfied on or before 31st March 2020, as per agreement terms.
As a part of the closing conditions of the proposed agreement, Torotel was expected to acquire a prior written consent from Collins Aerospace, consistent with the consent to change of control under the LTA (long-term supply agreement) made between Torotel and Collins. Despite its effort, with proper notice, to obtain the consent, Collins refused to provide the consent without Standex offering certain concessions beyond the LTA. Collins and Standex failed to agree to terms, which ultimately led to the termination of the proposed acquisition agreement.
According to David Dunbar, Chief Executive Officer and President at Standex, the company is decisively terminating the profitable acquisition agreement of Torotel. Despite Torotel’s complementary capabilities that are a strong fit for Standex’s portfolio of high reliability magnetics, it failed to meet the conditions that are necessary for closing the transaction by the contractual end date.
Mr. Dunbar further added that the company will continuously rise and focus on leveraging their core capabilities and strengths to bring profitable growth, under the support of its strong financial position and balance sheet.
Herb Sizemore, Torotel’s Chief Executive Officer & President, has reportedly stated that the company is disappointed with the failure of acquiring the consent from Collins, which resulted in the immediate dismissal of the agreement. It believes the deal would have been beneficial for both the parties, with Torotel’s robust defense and aerospace business and its leading position as a manufacturer and designer of the custom magnetic products as well as Standex’s core production strengths and strong financial position.