Integrated Electrical Services, Inc. (NASDAQ: IESC) (“IES”) and MISCOR Group, Ltd. (OTCQB: MIGL) (“MISCOR”), today announced that IES Subsidiary Holdings, Inc., a wholly owned subsidiary of IES, has entered into a definitive merger agreement to acquire all of the outstanding common stock of MISCOR for an aggregate transaction value of approximately $24 million. For MISCOR shareholders, the per share consideration will be based upon MISCOR’s average daily debt balance over the 30-day period ending fifteen business days prior to the closing of the transaction. As of March 11, 2013, MISCOR’s unaudited average daily debt balance over the prior 30-day period was approximately $7.2 million. MISCOR anticipates that its debt balance at closing of the transaction will be between $6.5 and $5.5 million, which would yield consideration of between $1.48 and $1.57 per share, a 26 to 34 percent premium to MISCOR’s 60-day trading average. The price-per-share adjustment will be communicated to shareholders prior to the closing of the election period and is more fully described in the definitive merger agreement.
With annual revenues of approximately $50 million, MISCOR provides maintenance and repair services to industrial customers, including electric utility, wind power, transportation, energy, pulp and paper, steel and mining. It is engaged in both on-site and off-site electrical and mechanical repair and remanufacture of industrial equipment including electric motors, transformers, switchgear, magnets, overhead cranes and generators. MISCOR also manufactures and provides repair services for key components in large transportation related motors and engines. MISCOR has locations in Indiana, Alabama, Ohio, West Virginia, Maryland and California.
“We believe MISCOR’s electromechanical service offerings are an excellent strategic complement to our existing Industrial business,” commented James M. Lindstrom, Chairman and Chief Executive Officer of IES. He continued, “The transaction meets our prudent strategy and financial criteria for investments, increases our base of recurring revenues and is expected to accelerate the utilization of IES’ net operating loss tax carryforwards, creating value for all IES shareholders. Finally, the diversification of revenue and cash flow streams across multiple customer segments and geographies enhances our capability for further growth.”
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