Industrial Rubber Products Inc., a leading designer, producer, and applicator of protective coatings to pipeline and industrial markets, on August 20 announced that it has entered into a definitive merger agreement with affiliates of Lime Rock Partners, a Westport, Conn.-based private equity firm focusing on the global energy industry, and Thompson Street Capital Partners, a St. Louis-based private equity firm focused on the manufacturing, distribution and services industries. The merger provides for the acquisition of Industrial Rubber Products for $16.50 per share (inclusive of approximately $0.89 per share that is subject to escrow) in cash, which per share price may be reduced for customary transaction expenses incurred by the company. The acquisition price represents an approximate 49 percent premium to the average closing price of Industrial Rubber over the preceding 20 trading days.
It is anticipated that the management of the company, including its president, Daniel Burkes, will continue in their current officer positions and retain a meaningful portion of their ownership.
The board of directors of Industrial Rubber Products, upon the recommendation of a special committee of disinterested directors, unanimously approved the merger agreement and recommends that the shareholders of Industrial Rubber Products vote in favor of the merger agreement and the merger. Stifel, Nicolaus & Company Incorporated served as financial adviser to Industrial Rubber Products, and has delivered a fairness opinion to the special committee of its board of directors.
The board of directors of Industrial Rubber Products believes that this transaction provides a substantial share price premium and market liquidity for its current shareholders, while producing a more focused and flexible, private ownership structure for the company, and its employees, as it continues to deliver its IRACORE Pipe System and other leading-edge products to its customers in the oil, mining, and industrial sectors.
Founded as Industrial Rubber Applicators in 1957, Industrial Rubber Products sells protective products and coating for applications to steel pipe and other industrial equipment. With seventeen products lines, the company serves customers worldwide in the energy, mining, aggregates and other end markets. Since 2006, the company's revenue has almost doubled, driven in large part by the success of the IRACORE Pipe Systems, which has broad applications to the oil sands and other industries.
The board of Industrial Rubber Products expects the transaction to close in September 2008 subject to shareholder approval and other customary closing conditions.