MiddleGround Management, LP entered into a definitive merger agreement to acquire The L.S. Starrett Company for approximately $120 million.
March 10, 2024
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MiddleGround Management, LP entered into a definitive merger agreement to acquire The L.S. Starrett Company (NYSE:SCX) for approximately $120 million on March 8, 2024. 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 the Company must pay Parent a fee of $4,350,000 in connection with the termination of the Merger Agreement and that Parent must pay the Company a fee of $8,700,000 million in connection with the termination of the Merger Agreement.
The proposed transaction has been approved by the Board of Directors of MiddleGround and Starrett. Starrett board unanimously approved the transaction. The transaction is expected to close in mid-2024, subject to the approval by at least two-thirds of Starrett?s shareholders and other conditions to closing. Lincoln International LLC is serving as lead financial advisor to Starrett and Zachary R. Blume of Ropes & Gray LLP is serving as legal counsel to 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 and Steve Pratt of Dechert LLP serving as legal counsel to MiddleGround. Lincoln International LLC acted as fairness opinion provider to the board of Starrett.
The L.S. Starrett Company is engaged in the business of manufacturing various products for industrial, professional and consumer markets. The Company offers measuring and cutting products to the market through multiple channels of distribution throughout the world. Its products include precision tools, electronic gages, gage blocks, optical, vision, laser measuring equipment, custom engineered granite solutions, tape measures, levels, chalk products, squares, band saw blades, hole saws, hacksaw blades, jig saw blades, reciprocating saw blades, M1 lubricant and precision ground flat stock. Its tools and instruments are sold throughout North America in over 100 other countries. The Company primarily distributes its precision hand tools, saw and construction products through distributors or resellers both domestically and internationally. It principally serves the global manufacturing industry, including metalworking, construction, machinery, equipment, aerospace and automotive markets.
THE L.S. STARRETT COMPANY 
