Louis Giraudo’s resignation last week as a director of Overhill Farms Inc. revealed a heated behind-the-scenes competition to acquire the company.
Giraudo, who is co-founder and senior managing partner of San Francisco-based private equity firm GESD Capital Partners LLC, stepped down Feb. 4, citing a disagreement with the board.
In submitting his resignation, Giraudo also disclosed that GESD, in a partnership with Citicorp Venture Capital, had been attempting to acquire all shares of the $192 million-a-year, Vernon-based maker of frozen foods, with a proposed price of $4.40 per share a 74 percent premium over the company’s closing price last Tuesday. News of the offering sent shares up sharply.
According to Overhill Farms, GESD was one of two groups competing in the past few weeks to acquire the company. The identity of the other bidder has not been disclosed.
“Both entities have expressed an interest in acquiring all of the outstanding shares of Overhill Farms and taking it private,” said Alexander Auerbach, a director. “There have been four bids each of the entities has submitted two bids and they have each been successively higher.”
On Feb. 1, the GESD group asked for an exclusive negotiating period during which all other bidders would be restricted. But last week, the board declined to grant the request and refused any further letters of interest until after it released its quarterly earnings report Feb. 8.
Additionally, Auerbach said, the company had not intended publicly to reveal the acquisition attempts but was forced to after Giraudo disclosed some details.
In a letter, Giraudo said he was resigning due to “the failure of the company and its board of directors to respond appropriately” to the request for exclusivity. Calls to Giraudo were not returned.
Giraudo has said he is still interested in acquiring the company. After revelations of the GESD offer, the company’s stock price Wednesday surged to $3.65 a 45 percent increase for the day.
The following day the company reported its revenues were up 40 percent to a record $56.8 million in the fiscal first quarter. It attributed the jump to increased food demand from airlines. Net income, however, was up just 1.4 percent to $1.6 million.
Another Acquisition
Teledyne Technologies Inc. bolstered its underwater cable technology business with a recent $57.7 million purchase of United Kingdom-based TSS International.
Teledyne, a Thousand Oaks manufacturer of electrical components for the aerospace and commercial sectors, said the acquisition will strengthen its underwater interconnect business, which provide positioning capabilities for offshore oil-drilling operations.
This is the second underwater interconnect acquisition the company has made in the past few months and the fourth overall purchase in the same period.
Jason VanWees, vice president of corporate development and investor relations, said the company is looking to buy related companies to fortify its different ventures.
“We’re seeking businesses that have complementary technologies and businesses to what we already own,” he said.
For example, the company last month closed the acquisition of Impulse Enterprise, a San Diego-based manufacturer of underwater electrical systems.
VanWees said Teledyne, a $1.62 billion company, has a growth strategy centered on acquisition. The company also announced last week that it closed the deal for Judson Technologies, a Montgomeryville, Pa.-based maker of infrared products. Terms of the transaction were not disclosed.
Tanker Delays
The Air Force has pushed back yet again the awarding of a $40 billion contract to replace 179 of its aerial refueling tankers.
Los Angeles defense contractor
Northrop Grumman Corp. is competing against Chicago-based Boeing Co. for
the contract, which could top $100 billion.
Pentagon officials pushed their meeting regarding the tanker back to Feb. 22. It was originally scheduled for Feb. 13. They are expected to announce a winner in the weeks after the meeting. The decision on the contract has already been pushed back several times from its original fall target date.
Aerospace suppliers across the country are awaiting the announcement, which could support tens of thousands of jobs. Northrop has said its tanker program would contribute $360 million to California’s economy and support 7,500 jobs in the state. Boeing said its program would contribute $175 million and support 4,000 California jobs.
Staff reporter Richard Clough can be reached at (323) 549-5225, ext. 251, or at [email protected].
