Ohio Competitor Rejects Acquisition Offer by Bisco
Bisco Industries Inc., a distributor of industrial nuts and bolts, said Thursday that it is “disappointed” that an Ohio competitor has rejected its offer to buy the firm, in a transaction valued at $72 million.
Jay Conzen, a Bisco spokesman, said RB & W formally rejected the offer Thursday. In a letter to Bisco officials, RB & W, which is eight times the size of the Anaheim company and is based in Mentor, Ohio, questioned the ability of Bisco to finance the transaction.
“We are disappointed that the RB & W board hastily rejected our offer due to concerns about financing,” Conzen said.
He said Bisco is willing to provide more details of its financing arrangements but first wants RB & W to supply non-public financial information that Bisco needs to complete the deal.
Bisco’s offer includes payment of $5 a share in cash for RB & W’s stock, for a total of $26.5 million. It would also issue preferred stock at $2 a share, or $10.6 million, which would be redeemable in two years at $2.50 a share, or $13.25 million. The deal also calls for Bisco to assume payments on $35 million of long-term debt owed by RB & W.
Bisco, a privately held company, would continue to operate RB & W’s fastener distribution business but would sell its manufacturing operations to help pay for the acquisition, Conzen said.
Since May, Bisco has paid $1.3 million to acquire a 6.8% stake in the Ohio company. RB & W management owns about 10% of the company, most of which is held by Chairman John Lohrman.
Lohrman did not return calls for comment Thursday.
RB & W reported a loss of $852,000 on sales of $40 million for the first quarter ended March 31, attributing the loss to a sales drop in the automotive industry.
RB & W’s distribution business had sales of $80 million for its last fiscal year, while its manufacturing unit had $95 million in sales. The company employs 1,200 people, 350 of whom work in distribution.
By comparison, Bisco is much smaller, with sales of just $20 million for the year ended Aug. 31, 1990.
Conzen declined to comment about whether Bisco will continue to acquire RB&W; stock.
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