Molex being taken private by Koch Industries in $7.2-billion deal

Koch will pay $38.50 per share, a 31-percent premium over the September 6 closing price of Molex’s common stock.

Sep 9th, 2013

Molex recently announced it has entered into an agreement with Koch Industries Inc. to go private. According to information provided by Molex, the transaction amount will total $7.2 billion. When the transaction is complete—which the companies expect to happen by the end of 2013—Molex will become a standalone subsidiary of Koch Industries. The connectivity manufacturer will continue to be operated by its current management team and headquartered from its Lisle, IL facilities.

An announcement from Molex explained, “Under the terms of the agreement, 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 … Based on the closing stock prices on September 6, 2013, the purchase price represents a 42-percent premium to the equity value of Molex’s publicly traded stock—specifically a 31-percent premium to the stock and a 56-percent premium to the Class A common stock.” The announcement further explained: “Certain members of the Krehbiel family and certain executive officers of Molex, owning in the aggregate voting stock representing approximately 32 percent of the common stock and 94 percent of the Class B common stock, have entered into voting agreements with Koch by which they have agreed to vote their stock in support of the transaction.”

Fred Krehbiel is co-chairman of Molex’s board. He said, “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. The transaction is expected to provide substantial opportunities for our worldwide employees, many of whom have spent much of their working lives at Molex and are responsible for the company’s long-term success.”

Martin Slark, Molex’s vice chairman and chief executive officer, commented, “For our customers and employees, this transaction will allow us to build on Molex’s proud past and strengthen us for a powerful future. We are excited to work with Koch to continue our track record of growth and investment in people, innovation and technology.”

Koch Industries’ chairman and chief executive officer Charles Koch called the deal “an exciting acquisition that matches up well with our culture and our core capabilities. It also provides a significant new platform for growth. Molex has become a world leader by focusing on product innovation and value creation, driven by its talented leadership and employees. We look forward to jointly applying the capabilities of our two companies to help take both to the next level.”

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