Aurafin LLC, a privately held company and OroAmerica Inc. (NMS:OROA), to a merger in which OroAmerica would become a wholly owned subsidiary of Aurafin. OroAmerica stockholders will receive $14.00 per share.
The agreement is subject to approval by the OroAmerica stockholders and other conditions.
Both companies manufacture and distribute karat gold jewelry products and serve most large U.S. retailers.
Guy Benhamou, chairman and CEO of OroAmerica, stated that the merger will provide all stockholders of OroAmerica the opportunity to realize a significant premium for their shares, which, on April 24, had a closing market price of $9.60. Benhamou has agreed to continue as president of the OroAmerica subsidiary following the merger.
The merger is subject to Aurafin’s consummating financing for the merger price and for the credit and capital needs of the combined companies. Michael Gusky, chairman and CEO of Aurafin, stated that Aurafin has obtained written financing commitments, which, subject to satisfaction of specified conditions, would provide the required financing.
Gusky added: ”The consolidation that is occurring in retail has created larger customers requiring stronger suppliers with greater focus and logistics expertise. Aurafin will benefit from the addition of OroAmerica’s extensive manufacturing facilities and proprietary jewelry lines. Aurafin and OroAmerica share an enthusiasm for innovation, product quality and customer satisfaction. These shared values make this transaction very desirable for our companies and our customers.”
Benhamou added: ”OroAmerica’s unique price-pointed products are a perfect complement to Aurafin’s fashion-oriented products, resulting in a full spectrum of products and price points.”
Other conditions to the merger include the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act. No date was announced for the special meeting of OroAmerica stockholders to vote on the merger, but Benhamou said that notice of the special meeting will be given promptly after clearance of preliminary proxy solicitation material to be filed with the Securities and Exchange Commission. Benhamou also said that, in light of the proposed merger, the Annual Meeting of Stockholders scheduled for June 7, 2001, is indefinitely postponed and will be canceled if the merger is completed.