United Industrial Corporation
announced today that it has entered into a merger agreement to divest its energy subsidiary, Detroit Stoker Company, for $22.4 million, subject to adjustment.
Under the agreement, Detroit Stoker will merge with Bram Acquisition Corporation, a wholly owned subsidiary of DSC Services, a newly formed corporation affiliated with a private investment group. The merged enterprise will retain the Detroit Stoker Corporation name and, upon completion of the merger, will become a wholly owned subsidiary of DSC Services.
United Industrial will receive $17.4m in cash at closing, subject to adjustment, and a $5m promissory note guaranteed in part by an individual who is a principal of the affiliated private investment group.
The closing of the sale, anticipated to take place by the end of the first quarter of 2007, is contingent upon completion of normal and customary pre-closing conditions, including financing.
‘The consummation of the merger will mark attainment of a significant milestone in our ongoing strategy to focus UIC on its core aerospace and defence business,’ commented Frederick M. Strader, president and chief executive officer of UIC.