Astrosystems, Inc., a publicly held company based in Lake Success, New York, is listed on NASDAQ. It supplies AC frequency sources, power converters, uninterruptible power supplies, motion sensors and control devices as well as power supplies to industrial and defense oriented customers.
OEM Capital was asked to assist Astrosystems, Inc. in selling all of its operating businesses prior to a contemplated shareholder distribution. Since each of our client’s three businesses addressed distinct markets, we developed a sales program to find synergistic buyers for each business in order to maximize shareholder value.
OEM Capital worked closely with management to prepare detailed historical and budgetary financial data showing the performance of each product line and tying the results to the company’s audited financial statements. Although the historical performance and fortunes of each business were very different, we knew offering them as product lines would make them attractive to the largest number of bidders.
Our presentations elicited several offers for each business, with a few of the bidders indicating interest in more than one. Since we wished to coordinate the sale of the three businesses so as to minimize the expense to Astrosystems, Inc., it was necessary to assess not only the attractiveness of each offer but the flexibility of each bidder. As a result of our program, our client was able to conclude the divestitures in a timely manner, realize a premium price over book value and allow a large number of its employees to be hired by the purchasers.
Our success with Astrosystems, Inc. illustrates that, whether a business is healthy, under performing or distressed, superior valuations can be realized for the selling shareholders by a well-executed approach to a sale or divestiture by merger and acquisition professionals who are knowledgeable about the industry and the intentions of its participants.