Belden in takeover battle for RuggedCom

Belden in takeover battle for RuggedCom

Belden has made an all-cash offer to acquire Canada's RuggedCom for C$22.00 per share, which implies a total purchase price of approximately C$280 million (US$277 million). The offer represents a 62 percent premium to the closing share price of C$13.61 as of December 16, 2011. Following a recommendation by RuggedCom directors that shareholders should reject the offer, Belden on January 4 reaffirmed its bid of C$22.00 per share with John Stroup, president and CEO of Belden saying, “We continue to be confident that RuggedCom shareholders will recognize that our offer is in their best interests and delivers strong and fair value based on the current market outlook.” And in a further statement on January 23, Belden announced that it would extend its bid until February 9 in order for RuggedCom shareholders to know the outcome of an Ontario Securities Commission hearing that is considering Belden's request for an order to cease trading the shareholder rights plan adopted by the RuggedCom board in response to Belden's offer. Headquartered in Concord, Ontario, Canada, RuggedCom is a provider of rugged communications networking solutions designed for harsh environments, including those found in electrical power substations, oil refineries, military applications, intelligent transportation and metals and minerals processing. “For RuggedCom shareholders, the offer is compelling in that it provides certainty of value and immediate liquidity at an attractive premium to RuggedCom's pre-offer share price,” said Stroup. “This offer is grounded in Belden's growth strategy to enhance our global networking business portfolio. We believe that the combined company would be a technology leader in Belden's target market segments and would deliver considerable value for Belden customers and shareholders, as well as provide growth opportunities to RuggedCom employees.” According to Belden, the two companies have highly complementary business models and technologies and the acquisition would accelerate the growth of Belden's networking business in the electric power transmission and distribution and transportation sectors. Belden also noted that its global footprint, with manufacturing facilities in North America, South America, Europe and Asia and a market presence in nearly every region in the world, coupled with its diverse networking business portfolio – including Byres, GarrettCom and Hirschmann – would provide a broader platform and market reach upon which to leverage RuggedCom's talent and capabilities.