Mill Road Capital has raised its offer price to acquire Huttig Building Products.
In the latest acquisition proposal, Mill Road has increased its acquisition proposal to $4 per share for all of the shares it does not already own. This is a 142% premium over Huttig’s closing stock price of $1.65 on Aug. 6.
The private investment firm already owns about 8.1% of Huttig’s shares and said that purchase price would be payable in cash.
Mill Road’s original offer, sent in August, was for $2.75 per share. That represented a premium of 67% over the Huttig’s Aug. 6 closing stock price.
Stock prices of Huttig hit a high for the year and closed at $3.42 on Oct. 15, up 41.91% from the previous day’s trading. The building products distributor closed at an annual low of $0.59 on March 23.
Based in Greenwich, Conn., Mill Road said it plans to fund the acquisition through a combination of third party debt and equity capital provided by Mill Road.
“We have ample equity capital to complete the transaction and are highly confident in our ability to raise an appropriate amount of debt financing,” Justin Jacobs, managing director of Mill Road Capital, said in the latest offer letter to Huttig.
Mill Road also said that its familiarity with Huttig, along with its experience in going-private transactions, would allow it to complete due diligence and documentation of the acquisition within 45 days.
In its most recent financial report, St. Louis, Mo.-based Huttig reported a second quarter net income of $1.6 million compared to a net loss of $10.3 million for the second quarter of 2019. But second quarter sales fell 12.1% to $192 million from second quarter 2019 net sales of $218.5 million.
As of August, Huttig said that it operated 25 distribution centers serving 41 states. The distributor’s customer base includes building materials dealers, national buying groups, home centers and industrial users, including makers of manufactured homes.
In addition to distribution services, Huttig produces its own line of Huttig-Grip fasteners.