Technitrol Inc. and Pulse Engineering Inc. Announce Definitive Merger Agreement

Strategic Insights -

Technitrol Inc. and Pulse Engineering Inc. have jointly announced a definitive merger agreement, under which Technitrol will acquire all issued and outstanding Pulse shares for approximately $24.0 million in cash and approximately 1,650,000 shares of Technitrol stock. The merger is expected to be beneficial to both Pulse and Technitrol shareholders, with the combined operation expected to be well-positioned to serve the many opportunities available in the world local area network (LAN) and telecommunications marketplace. The merger is subject to various conditions, including receipt of required regulatory approvals.

Key Takeaways:

  • The merger agreement involves the acquisition of all issued and outstanding Pulse shares by Technitrol for $24.0 million in cash and 1,650,000 shares of Technitrol stock.
  • Pulse stockholders can elect to receive all cash or all Technitrol common stock, subject to the limitation that no more than 55% and no less than 50% of the Pulse shares will be converted to Technitrol common stock.
  • The exchange ratio will be adjusted based on the average closing price of Technitrol's stock during a ten trading day period preceding closing, with an upward adjustment if the price is below $13 3/4 and a downward adjustment if the price is above $16 3/8.
  • The purchase price for Pulse shares, if a stockholder receives 50% cash and 50% Technitrol common stock, will be no less than $8.25 nor more than $9.01 per share.
  • A Pulse stockholder who receives all Technitrol common stock will not recognize federal income tax on the exchange, while a stockholder who receives a combination of cash and Technitrol common stock may or may not recognize federal income tax on the exchange depending on their individual tax circumstances.
  • The boards of directors of Technitrol and Pulse have recommended that their respective shareholders approve the merger at special meetings to be called later this year.
  • The merger is subject to various conditions, including receipt of required regulatory approvals.

Statistics:

  • Technitrol will acquire approximately 1,650,000 shares of Pulse stock.
  • The merger is valued at approximately $24.0 million in cash and 1,650,000 shares of Technitrol stock.
  • The exchange ratio is set to be adjusted based on the average closing price of Technitrol's stock, with an upward adjustment if the price is below $13 3/4 and a downward adjustment if the price is above $16 3/8.
  • The purchase price for Pulse shares, if a stockholder receives 50% cash and 50% Technitrol common stock, will be no less than $8.25 nor more than $9.01 per share.

Sources:

  • PRNewswire, May 23, 1995
  • Technitrol Inc. and Pulse Engineering Inc. press release