Portland, Oregon-based Vigor Industrial has entered into an agreement to purchase the 94-year-old Todd Shipyard Corporation, which operates ship building, maintenance and repair facilities in Bremerton, Everett and Seattle.
The agreement calls for Vigor to acquire the stock of Todd for $22.27 per share, or approximately $130 million, in an all-cash deal.
The Todd board of directors has unanimously approved the agreement.
Vigor’s tender offer is scheduled to commence no later than December 30, 2010, and will expire on January 28, 2011, unless extended.
Under the terms of the agreement, Todd may solicit superior proposals from third parties through January 28, 2011, subject to extension at Todd’s option as provided in the agreement.
Unless a third party offer appears, the Vigor transaction is expected to close in the first quarter of 2011.
“Todd is Puget Sound’s leading shipyard and the combination of Vigor and Todd will create the largest and most capable marine services company in the Pacific Northwest,” said Frank Foti, the President of Vigor. “The combination of resources and capabilities will allow the combined companies to expand both the scope and capacity of their ship repair and new construction business.”
Todd’s management will remain intact and all contracts will remain in place.
“We believe that the addition of Todd’s products to Vigor will help create a stronger, more diversified company with long-term advantages for both companies’ customers and employees,” said Todd President and CEO Stephen Welch. Todd currently employs about 800 workers.
Todd’s directors and officers and certain other stockholders who own an aggregate of approximately 15.3 percent of Todd’s outstanding stock have entered into agreements pursuant to which they have agreed to transfer their shares to Vigor and to vote their shares in favor of a merger if a vote is required by law.
Vigor claims it has obtained enough financing to purchase all 5.78 million Todd shares outstanding as well as refinance all existing Todd debt.
The terms of the agreement set 67 percent of outstanding Todd stock as the minimum Vigor must purchase for the deal to close. In the event that the minimum condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of shareholder approval.
In related news, at least a half-dozen shareholder-representing law firms have said they are investigating the agreement and how the Todd board may have abrogated its fiduciary responsibility and short-changed certain shareholders.
