MiddleGround Management, LP entered into a definitive merger agreement to acquire The L.S. Starrett Company (NYSE:SCX) from a group of shareholders for approximately $120 million on March 8, 2024. Pursuant to the agreement, Starrett shareholders will receive $16.19 per share in transaction. MiddleGround secured committed financing, consisting of a combination of equity financing to be provided by investment funds affiliated with MiddleGround, on the terms and subject to the conditions set forth in an equity commitment letter provided by such funds, and debt financing to be provided by a certain lender, on the terms and subject to the conditions set forth in a debt commitment letter. Following completion of the transaction, Starrett will become a wholly owned subsidiary of MiddleGround and Starrett?s Class A common stock will no longer be listed on any public market. The merger agreement also provides that Starrett must pay MiddleGround a fee of $4,350,000 in connection with the termination of the merger agreement and that MiddleGround must pay Starrett a termination fee of $8,700,000 million.
The transaction is subject to the approval by at least two-thirds of Starrett?s shareholders and other conditions to closing. The proposed transaction has been approved by the Board of Directors of MiddleGround. Starrett board unanimously approved the transaction and resolved to recommend that Starrett shareholders approve the agreement. The transaction was approved by Starrett shareholders at a special meeting of shareholders held on May 21, 2024. The transaction is expected to close in mid-2024. Lincoln International LLC is serving as lead financial advisor to Starrett and Zachary R. Blume, Aileen Kim, Allie Alperovich, Sharon Remmer, Peter Alpert, Lisa Kaltenbrunner, Erica Han and Scott Pinarchick of Ropes & Gray LLP are serving as legal counsel to Starrett. Lincoln International LLC also acted as fairness opinion provider to the board of Starrett. William Blair & Company L.L.C. is serving as exclusive financial advisor to MiddleGround in connection with the acquisition and debt financing of Starrett and Omoz Osayimwese, David Cosgrove, Stephen Leitzell, Lindsay Flora and Steve Pratt of Dechert LLP are serving as legal counsel to MiddleGround. Lincoln received fees for its services of approximately $300,000, of which a portion was payable at the time Lincoln was engaged by Starrett, and the remainder of which became payable upon Lincoln informing Starrett Board that it was prepared to deliver its opinion as requested. Lincoln will receive a customary fee of approximately $2.25 million from Starrett for its services under the M&A Engagement, a portion of which has been paid, and a significant portion of which is contingent upon the successful completion of the merger.

MiddleGround Management, LP completed the acquisition of The L.S. Starrett Company (NYSE:SCX) from a group of shareholders on May 23, 2024. In connection with the merger, Douglas A. Starrett, Thomas J. Riordan, Scott W. Sproule, Christopher C. Gahagan, Deborah R. Gordon, and Charles J. Alpuche ceased to be members of Starrett?s board of directors or any committee thereof. John Stewart and Justin Steil were elected to Starrett?s board of directors. Douglas A. Starrett?s officer title was changed from ?Chief Executive Officer and President? to ?Chief Executive Officer". In connection with the consummation of the Merger, the Company notified representatives of the New York Stock Exchange (?NYSE?) that the Merger had been completed and requested that NYSE delist the Class A Common Shares. As a result, shares of Class A Common Shares ceased to trade prior to market open on May 23, 2024, and became eligible for delisting from NYSE and termination of registration under the Securities Exchange Act of 1934, as amended.