Standex International Corporation (NYSE:SXI) entered into a definitive agreement to acquire Torotel, Inc. (OTCPK:TTLO) for $46.6 million on November 26, 2019. Under the terms of the deal, offer per share is $7.77 and includes the assumption of net debt of approximately $1.4 million. To finance the transaction, Standex will be utilizing a portion of the $257 million available under its revolving credit facility at the end of its fiscal first quarter at September 30, 2019. Certain significant shareholders and each Director and Executive officer holding shares, who collectively own approximately 62% of Torotel's outstanding shares, have signed voting agreements committing to vote their shares in favor of the transaction. If the agreement is terminated by by either Torotel or Standex as a result of Torotel agreeing to a superior proposal or making an adverse recommendation change with respect to a superior proposal, Torotel will pay a termination fee of $0.931 million. If the agreement is terminated by by either Torotel or Standex not in connection with a superior proposal, Torotel will pay a termination fee of $1.863 million. If the agreement is terminated by either Torotel or Standex and within 12 months of such termination, Torotel enters into an agreement for and consummates another takeover proposal, Tortel will pay a termination fee of $0.931 million.

The transaction is subject to customary closing conditions, regulatory approvals, the approval of two-thirds of Torotel shareholders as well as third party approvals. Special Committee of the Board of Torotel consists of Barry Hendrix, Anthony Lewis and Scott Still. The Board of Torotel and Standex unanimously approve the deal. The transaction is expected to close in the first calendar quarter of 2020. As of December 12, 2019, the transaction is expected to close in Torotel's fourth fiscal quarter ending April 30, 2020. Standex expects the acquisition to be slightly accretive to its earnings in its first year of ownership excluding one-time purchase accounting and transaction costs. Benjamin G. Lombard of Reinhart Boerner Van Deuren s.c. acted as legal advisor to Standex. Edward Wilson of Husch Blackwell LLP acted as legal advisor and Philpott Ball & Werner, LLC acted as financial advisor and fairness opinion provider to Torotel. Torotel paid Philpott Ball & Werner a fee of approximately $200,000 upon delivery of the opinion and fee of $868,490 for advisory service upon the successful completion of the transaction. Computershare, Inc. acted as transfer agent to Torotel.