A private investment group has mounted a tender offer to purchase Durakon Industries Inc., a maker of plastic bedliners, for $99.3 million.
Littlejohn & Co. LLC, an investment fund located in Greenwich, Conn., said June 18 it has entered a definitive agreement to buy the outstanding shares of Durakon.
Littlejohn agreed to pay $16 per share of common stock for Durakon, based in Lapeer, Mich. As of June 17, Durakon stock was trading at $12.06 per share on Nasdaq.
Durakon's board of directors already has agreed to the cash transaction. Board members hold about 28 percent of the company's 6.2 million shares outstanding, according to an April proxy form.
Durakon is the largest maker of thermoformed pickup-truck bedliners, sold to original equipment makers and the aftermarket, said analyst Gerald Marks of Roney & Co., of Detroit.
Durakon wields about 42 percent of the $175 million to $200 million bedliner market, Marks said. The firm's financial health is sound, he said. It recorded $192.3 million in 1998 sales, up from $179.9 million for 1997. Profit also rose sevenfold from 1997 levels, to $7.9 million at the end of 1998.
Still, Durakon had been undervalued by Wall Street analysts, Marks said. At the same time, experts had no idea Durakon was shopping for buyers, he added.
``We wondered about them,'' he said. ``We felt Durakon was undervalued. If the market didn't recognize that, [another buyer] might have been able to spot that.''
Durakon employs 811 at plants in Lapeer; Greencastle, Pa.; Clinton, Tenn.; and Lerma, Mexico.
The bedliner supplier ranked 12th on Plastics News' 1998 survey of top thermoformers.