Steel Partners Holdings L.P. (NYSE:SPLP), a company that InvestingPro analysis shows maintains a perfect Piotroski Score of 9 indicating exceptional financial health, announced on Friday a definitive move to acquire Steel Connect, Inc. through a short-form merger, a transaction that is set to transform Steel Connect into an indirect, wholly owned subsidiary of Steel Partners.
With a market capitalization of $844 million and strong financial metrics, Steel Partners continues to demonstrate robust business execution. This strategic action follows the approval of the Audit Committee of Steel Connect's Board of Directors on Wednesday, November 27, 2024.
The merger is expected to be executed in compliance with Section 253 of the Delaware General Corporation Law, enabling Steel Partners, which owns over 90% of Steel Connect's outstanding common stock on an as-converted basis, to carry out the merger without the need for approval from Steel Connect's Board or other stockholders not affiliated with Steel Partners.
Under the terms of the merger, at the effective time, unaffiliated Steel Connect stockholders will receive $11.45 in cash per share, excluding those who properly exercise appraisal rights. Steel Partners, currently trading near its 52-week high of $43.99, shows strong financial fundamentals with a notably low P/E ratio of 3.78 and an impressive free cash flow yield of 36%.
Want deeper insights into Steel Partners' valuation metrics? InvestingPro subscribers have access to over 10 additional valuable financial tips and metrics. Additionally, if certain litigation proceeds known as Reith Net Litigation Proceeds have not been distributed before the merger, each share of common stock will be entitled to one contingent value right (CVR), pursuant to the terms of a CVR Agreement.
The CVR Agreement stipulates that the SP Investors, with the exception of certain individuals, have waived their right to receive any portion of the Reith Net Litigation Proceeds concerning shares held as of May 1, 2023, or issuable upon conversion of certain instruments. Current directors and officers of Steel Connect have also waived their rights to these proceeds.
The CVRs will not be transferable except under specific conditions, will not be registered with the SEC, and will not represent any equity or ownership interest in Steel Partners or Steel Connect. They will carry no voting or dividend rights, and interest will not accrue on any payable amounts.
Following the completion of the merger, Steel Connect's common stock will be delisted from the NASDAQ Stock Exchange and will no longer be publicly traded, making it eligible for deregistration under the Securities Exchange Act of 1934.
For investors seeking comprehensive analysis of similar corporate actions and identifying undervalued opportunities, InvestingPro's advanced screening tools provide invaluable insights into company valuations and financial health metrics.
The transaction is subject to customary closing conditions, including regulatory approvals and the absence of any adverse changes or circumstances that could impede the merger.
This announcement is based on information from a SEC filing by Steel Partners Holdings L.P.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.