Aeroflex (NASDAQ:ARXX)
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From May 2019 to May 2024
Aeroflex Incorporated (Nasdaq: ARXX) announced today that it has
received from Veritas Capital a non-binding proposal, subject to due
diligence and other conditions, for a leveraged recapitalization of
Aeroflex in which Aeroflex's stockholders would receive a cash dividend
of $14 per share and retain in the aggregate 21.2% of the fully diluted
common equity in a significantly leveraged Aeroflex. Under the proposal,
Veritas Capital and co-investors to be identified would acquire
convertible preferred stock of Aeroflex, which on an as converted fully
diluted basis would represent 78.8% of Aeroflex’s
common stock, and the proceeds from the issuance of the convertible
preferred stock and other proposed debt and equity financing would be
used to fund payment of the cash dividend. The proposed transaction also
contemplates various conditions to consummation of a definitive
transaction, including approval by Aeroflex’s
stockholders. Aeroflex said that there is no assurance that the proposal
from Veritas Capital will result in a definitive proposal, a definitive
agreement or a consummated transaction.
Aeroflex’s Board of Directors, after
consultation with its outside counsel and independent financial
advisors, has determined in good faith and in its reasonable judgment,
in accordance with Aeroflex’s merger agreement
with affiliates of General Atlantic and Francisco Partners, that the
proposed leveraged recapitalization is a bona fide acquisition proposal
that constitutes or could reasonably be expected to lead to a "superior
proposal" (as that term is defined in the merger agreement) that is
reasonably capable of being consummated and that accordingly Veritas
Capital is an "excluded party" (as that term is defined in the merger
agreement). Aeroflex intends to continue to have discussions and
participate in negotiations with respect to the leveraged
recapitalization proposal. In the opinion of Aeroflex, in the event that
Aeroflex were to terminate the merger agreement to permit it to enter
into a transaction agreement with Veritas Capital, it would be required
to pay to an affiliate of General Atlantic and Francisco Partners up to
$22.5 million as a break-up fee and reimbursement of expenses. General
Atlantic and Francisco Partners have informed Aeroflex that they
disagree with the conclusion of Aeroflex’s
Board of Directors that the non-binding proposal results in Veritas
Capital or any additional co-investors being deemed an excluded party.
General Atlantic and Francisco Partners also have informed Aeroflex that
they disagree with the Aeroflex Board's determination that the
non-binding proposal from Veritas Capital could reasonably be expected
to lead to a superior proposal because, among other things, the equity
financing necessary to complete the proposed transaction has not been
fully committed. In the event that Veritas Capital is determined not to
be an excluded party, the break-up fee and expense reimbursement payable
to General Atlantic and Francisco Partners in the event that Aeroflex
were to terminate the merger agreement to permit it to enter into a
transaction agreement with Veritas Capital would instead be an amount up
to $37.5 million.
Aeroflex stressed that the merger agreement with affiliates of General
Atlantic and Francisco Partners remains in effect, does not contain any
financing or due diligence conditions and that those affiliates would
have the right under the merger agreement to be advised of the proposed
terms of any alternative acquisition proposal and an opportunity to
propose to Aeroflex improvements to the terms of the merger agreement
before Aeroflex would be permitted to terminate the merger agreement to
permit it to enter into a transaction agreement providing for an
alternative acquisition proposal. Aeroflex’s
Board of Directors has not changed its recommendation regarding the
proposed merger with an affiliate of General Atlantic and Francisco
Partners and expects to mail the proxy materials relating to the
proposed merger by the end of next week for consideration at Aeroflex’s
previously announced special meeting of stockholders scheduled for May
30, 2007.
About Aeroflex
Aeroflex Incorporated (Nasdaq: ARXX) is a global provider of high
technology solutions to the aerospace, defense, cellular and broadband
communications markets. The Company’s diverse
technologies allow it to design, develop, manufacture and market a broad
range of test, measurement and microelectronic products. The Company’s
common stock trades on the Nasdaq National Market System under the
symbol ARXX and is included in the SAP Small Cap 600 index. Additional
information concerning Aeroflex Incorporated can be found on the Company’s
Web site: www.aeroflex.com.
Forward Looking Statements
This release contains forward-looking statements, which are subject to
various risks and uncertainties. Discussion of risks and uncertainties
that could cause actual results to differ materially from management’s
current projections, forecasts, estimates and expectations is contained
in the Aeroflex’s filings with the SEC.
Specifically, Aeroflex makes reference to the section entitled “Risk
Factors” in its annual and quarterly reports.
In addition to the risks and uncertainties set forth in Aeroflex’s
SEC reports or periodic reports, the proposed transaction mentioned in
this release could be affected by, among other things, the occurrence of
any event, change or other circumstances that could give rise to the
termination of the merger agreement; the outcome of any legal
proceedings that may be instituted against Aeroflex and others related
to the merger agreement; failure to obtain stockholder approval or any
other failure to satisfy other conditions required to complete the
merger, including required regulatory approvals; risks that the proposed
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the merger; the amount
of the costs, fees, expenses and charges related to the merger and the
execution of certain financings that will be obtained to consummate the
merger; and the impact of the substantial indebtedness incurred to
finance the consummation of the merger.
Additional Information and Where to Find It
In connection with the proposed merger, Aeroflex will file a definitive
proxy statement with the SEC. The definitive proxy statement and a form
of proxy will be mailed to the stockholders of Aeroflex. BEFORE MAKING
ANY VOTING DECISION, AEROFLEX’S STOCKHOLDERS
ARE URGED TO READ THE PROXY STATEMENT REGARDING THE MERGER CAREFULLY AND
IN ITS ENTIRETY BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. Aeroflex’s stockholders will
be able to obtain, without charge, a copy of the proxy statement (when
available) and other relevant documents filed with the SEC from the SEC’s
website at http://www.sec.gov. Aeroflex’s
stockholders will also be able to obtain, without charge, a copy of the
proxy statement and other relevant documents (when available) by
directing a request by mail or telephone to Corporate Secretary,
Aeroflex Incorporated, 35 South Service Road, P.O. Box 6022, Plainview,
New York 11803, telephone: (516) 694-6700, or from Aeroflex’s
website, http://www.aeroflex.com.
Participants in the Solicitation
Aeroflex and its directors and officers may be deemed to be
participants in the solicitation of proxies from Aeroflex’s
stockholders with respect to the merger. Information about Aeroflex’s
directors and executive officers and their ownership of Aeroflex’s
common stock is set forth in the proxy statement for Aeroflex’s
2006 Annual Meeting of Stockholders, which was filed with the SEC on
October 5, 2006. Stockholders may obtain additional information
regarding the interests of Aeroflex and its directors and executive
officers in the merger, which may be different than those of Aeroflex’s
stockholders generally, by reading the proxy statement and other
relevant documents regarding the merger, when filed with the SEC.