Molex To Be Acquired By Privately-owned Koch Industries In $7.2 Bln Deal

(RTTNews) - Electronic connectors maker Molex, Inc. (MOLX, MOLXA) agreed Monday to be acquired by privately-owned conglomerate Koch Industries, Inc. in an all-cash deal valued at about $7.2 billion. The deal, approval by the boards of directors of both companies, is expected to close by the end of 2013.

Koch Industries will acquire all of Molex's outstanding shares, including the common stock, the Class A common stock and the Class B common stock, for $38.50 per share in cash. The deal is primarily subject to shareholder and regulatory approvals, but is not subject to a financing condition.

The offer price of $38.50 per share represents a significant 31 percent premium over Molex's closing share price of $29.35 on Friday. Following the announcement, the stock is soaring more than 31 percent in pre-market trading.

Wichita, Kansas-based Koch Industries is the holding company controlled by billionaire brothers, Charles Koch and David Koch, each of whom hold 42 percent of the company.

"After 75 years this was a difficult decision, but our board of directors and our family believe that this transaction, which follows a diligent and thorough review process by the board, provides outstanding benefits for all our stakeholders. Importantly, our shareholders will receive a significant premium and compelling value for their holdings," Molex co-Chairman Fred Krehbiel said in a statement.

Lisle, Illinois-based Molex is a 75-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. The company generated sales of about $3.6 billion for fiscal 2013.

Koch has entered into voting agreements with certain members of the Krehbiel Family and certain executive officers of Molex who own in the aggregate voting stock representing about 32 percent of the common stock. They have agreed to vote their shares in support of the deal.

Following the closure of the deal, the current management team of Molex will be retained, and it will become a standalone subsidiary of Koch, while also retaining its name and its headquarters.

"Molex has become a global leader by focusing on product innovation and value creation, driven by its talented leadership and employees," Koch said. "We look forward to jointly applying the capabilities of our two companies to help take both to the next level," Koch Chairman and CEO Charles Koch stated.

Koch noted that the proposed acquisition will provide it with a significant new platform for growth. Koch considers Molex "an exciting acquisition" that matches up well with its culture and core capabilities.

MOLX closed Friday's regular trading session at $29.34, down $0.34 on a volume of 0.41 million shares. In the past 52-week period, the stock has been trading in a range of $24.99 to $31.06.