Linear Enters Merger Agreement With IEI


International Electronics Inc. (IEI) has signed a definitive merger agreement to be acquired by Linear LLC, a wholly owned subsidiary of Nortek Inc. Under the terms of the agreement, which has been unanimously approved by IEI’s Board of Directors, Linear will commence a cash offer to acquire all outstanding shares of IEI common stock at $6.65 per share.

The tender offer is set to begin on or before May 29 and will stand for 20 business days, allowing IEI to respond.

Following completion of the tender offer in which 66 2/3 percent of IEI’s outstanding shares (determined on a fully-diluted basis) are tendered, Linear has committed to complete a second-step merger in which all remaining shares of IEI common stock will be converted into the right to also receive $6.65 per share.

IEI’s Board of Directors has unanimously recommended that shareholders accept the Linear offer. The per share price represents a premium of more than 66 percent more than the price in the current unsolicited tender offer by a subsidiary of Risco Ltd., and a premium of about 64 percent more than Monday’s closing price of IEI shares. In addition, the Linear offer represents a premium of about 123 percent more than IEI’s closing share price on March 5, the last trading day before Risco announced its tender offer for shares of IEI common stock.

“This is an agreement that we feel is going to be good for IEI customers as well as IEI shareholders,” IEI Senior Marketing Manager John Murzycki tells SSI. “There are a lot of synergies that we see in terms of Linear products and us that still need to be worked out, obviously. But there are some real opportunities in terms of strengthening and improving the company.”

Linear is a supplier of wireless residential security systems and access control and radio frequency (RF) products. Murzycki says the two companies rarely compete head to head although some overlap may exist in certain markets. “If you look at our systems and the majority of our products, the feeling is there is more room for synergies than there is duplication,” Murzycki says. “We are very excited about it.”

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