What is in this article?:
- Cybex Makes Moves to Privatize, Pending Shareholder Vote
- Is Public Too Public?
Cybex International’s announcement last month that its board of directors had approved a plan to take the company private may not have come as a surprise.
The privatization plan would mean that John Aglialoro (pictured), chairman and CEO of Cybex, would own the company along with his wife, Joan Carter, who is a director for Cybex, and UM Holdings Ltd., which the couple own.
Is Public Too Public?
Hicks says that being a public company is distracting and expensive, which is not good for the company, its employees, its customers or its shareholders.
As of press time, at least four law firms were looking at whether they would file lawsuits related to any possible breaches of fiduciary duties and whether the acquisition was purposely timed to take advantage of what the firms called a temporary drop in the share price of Cybex.
Under the terms of the deal, which is being called a merger agreement to go private, Cybex would be wholly owned by UM Holdings Ltd., which is owned by John Aglialoro, Cybex’s chairman and CEO, and his wife, Joan Carter, who is on the Cybex board. UM, Aglialoro and Carter own approximately 49.5 percent of Cybex’s stock.
Cybex shareholders will receive $2.55 payable in cash for each share of Cybex stock they own. The merger price reflects an 89 percent premium over the closing price of the company’s common stock on Oct. 16, the day before the merger announcement. The transaction has a total approximate value of $22 million. Hicks says the process was above reproach. “We’re very proud of the process,” Hicks says. “We’re very proud that John did not try to just make the minimum offer. He’s been conscious about trying to serve the shareholders all along since he’s been involved since 1997.”
The plan will be presented to shareholders at a meeting in January. Two-thirds of all shareholders and 50 percent of the non-interested shareholders (those who are not UM Holdings or Aglialoro and Carter) must approve the plan, according to Hicks. If approved at the meeting, the company could go private within a matter of weeks. Until then, Cybex must still act as a public company, which means reporting its quarterly financials.
Its third quarter results, released a week after the deal was announced, put the company’s net sales at $34.4 million, a slight increase from the $33.5 million it reported in third quarter 2011. Its net income was $1.1 million.