Analysis

Condor and Ault set to become a major force in power

6th January 2006
ES Admin
SL INDUSTRIES has announced that it has signed a definitive agreement to acquire all of the outstanding shares of common stock of Ault Incorporated (NASDAQ:AULT) (approximately 4,861,000 shares) for $2.90 per share in cash. SL Industries already owns Condor DC Power.
Under the terms of the definitive agreement, a wholly-owned subsidiary of SL Industries will commence a cash tender offer to acquire all of Ault’s outstanding shares of common stock. Upon completion of the tender offer, SL Industries will effect a merger between this subsidiary and Ault in which the remaining Ault shareholders will receive $2.90 per share in cash. In addition, SL Industries will cash out Ault stock options with an exercise price of $2.90 or less and all other outstanding options will be canceled. The board of directors of Ault has unanimously approved the acquisition and has voted to recommend that Ault’s shareholders accept the tender offer and tender their Ault shares. Following the merger, Ault will become a wholly-owned subsidiary of SL Industries. SL Industries expects to commence the tender offer on or before December 23, 2005.

Ault has agreed not to seek or solicit other offers or proposals to acquire Ault, or to furnish any non-public information or engage in discussions or negotiations in connection therewith, except under certain limited circumstances. Ault has also agreed to pay a break-up fee of $750,000 and to reimburse SL Industries' expenses up to $500,000 if this transaction is not consummated under certain circumstances.

The consummation of the transaction is subject to certain conditions, including the valid tender in the tender offer of at least a majority of the outstanding shares of common stock of Ault excluding shares held by SL Industries.

Commenting on the transaction, James Taylor, Chief Executive Officer of SL Industries, said: “We are very excited about Ault becoming part of the SL Industries Power Electronics Group. Ault’s broad customer base, presence in the Asian market and complementary product lines have tremendous strategic potential. The combination of the Condor and Ault product lines will create the premier power supply resource for the medical and other markets.”

Condor DC Power Supplies, also an SL Industries subsidiary, is the industry’s leading manufacturer of power supply products for the medical equipment industry and has recently opened a European HQ in the United Kingdom.

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