Nippon Mining Acquiring Gould For $1.1 Billion
ROLLING MEADOWS, Ill. (AP) _ Electronics maker Gould Inc., struggling to reduce its debt and reverse a string of losses, said Tuesday it was being bought by Nippon Mining Co. Ltd. of Japan for $1.1 billion.
Nippon Mining, one of Japan’s 50 largest industrial firms, will launch a tender offer to purchase all of Gould’s 45 million outstanding common shares of stock for $23.25 a share, the companies said in a joint statement.
Gould’s stock price soared in late trading as news of the transaction reached the New York Stock Exchange. Gould closed at $22.75 in composite trading, up $7.12 1/2 from Monday’s close.
Gould posted a net loss of $95.6 million last year on revenue of $933.4 million. It has been shedding divisions - mostly those involved in defense manufacturing - for several years in an attempt to reduce its long-term debt, which stood at $250 million at the end of June.
On Monday, the company announced it was selling its ocean systems division, which makes underwater listening equipment for the Navy, to Martin Marietta Corp. for $117 million.
Nippon Mining, already Gould’s partner in two enterprises, intends to proceed with Gould’s plan to divest its remaining defense systems business, according to the statement.
Gould, based in the Chicago suburb of Rolling Meadows, will retain its name and operate as a wholly owned subsidiary of Nippon Mining under the purchase agreement.
James F. McDonald, Gould’s chairman and chief executive officer, said the transaction was ″based first and foremost on maximizing share value for our stockholders.″
″By further combining the resources of our two companies, we believe there is great potential for these businesses to expand,″ he said in the statement.
Nippon Mining President Yukio Kasahara said, ″Gould has a very solid core business in materials and components.″
″Despite some of the difficulties experienced by the company in the recent past, we have great confidence in the future of that business,″ he said.
Gould and Nippon Mining, which earned $59.8 million last year on sales of $6.5 billion, have been partners since 1981 in Nikko Gould Foil Co. Ltd., which makes electro-plated copper foil.
Should Nippon Mining decide to sell Gould, the agreement contains a provision giving the Tokyo-based company an option to purchase Gould’s 50 percent stake in Nikko Gould Foil for $60 million.
In July, Gould and Nippon Mining formed another joint venture, Nippon Gould Computer Co. Ltd, to market superminicomputers in Japan.
In addition to their joint enterprises, Nippon Mining markets Gould fuses and fiber optic products.