Representative End User Clients
Representative Automation Clients
Representative Software Clients
Belden Inc. announced that it has submitted a proposal to the Board of Directors of Digi International Inc. to acquire Digi in an all-cash transaction valued at approximately $380 million.
Under the terms of the proposal, Digi shareholders would receive $13.82 in cash for each Digi share, representing a 35 percent premium over Digi's trailing one-month volume-weighted average price ("VWAP"), a 37 percent premium over Digi's trailing thirty-six month VWAP, and a 25 percent premium over Digi's share price of $11.05 on Thursday, November 10, 2016. The offer represents an implied enterprise value of $242 million, representing a premium of 54 percent to Digi's enterprise value of approximately $158 million on Thursday, November 10, 2016 and a 10x EBITDA multiple based on the high end of guidance provided by Digi to its shareholders on October 27, 2016. The acquisition would be fully funded with existing cash reserves and therefore is not subject to any financing contingency.
This proposal, which was initially formalized on November 4, 2016, was reiterated in a letter sent to Digi's Chairman, William Priesmeyer, and President and Chief Executive Officer, Ronald Konezny, after Belden received a letter from Digi on November 8, 2016 expressing unwillingness to engage in discussions. Belden is disclosing the contents of its letter in order to inform Digi's shareholders of the opportunity to realize a significant premium and the compelling strategic fit inherent in a combination of the two companies.
The addition of Digi to Belden's Industrial IT platform would create a unique and broad portfolio of wireless and embedded solutions for customers across a number of vertical markets. Further, Digi would benefit from Belden's proven business system, which would provide access to new growth markets. Belden and Digi have a history of commercial and technical collaboration, which provides Belden confidence of the strong strategic fit with Digi.
Belden has a strong track record of successfully acquiring and integrating a diverse range of businesses. Since 2007, Belden has deployed over $2.8 billion toward M&A to accelerate its strategic transformation.
Belden is prepared to engage in discussions immediately to work toward a successful completion of the proposed transaction, and Belden looks forward to working with Digi's management team and Board of Directors to maximize value for all stakeholders. Although there can be no assurances a definitive agreement will be reached between the companies, Belden is committed to pursuing this transaction and will continue to update shareholders on its progress as appropriate.
Keywords: Industrial IT, Wireless Solutions, Embedded Solutions, ARC Advisory Group.