Succession needs drove sale of Molex to Koch




Molex Inc. “was shopped around to 17 potential buyers,” but only Koch Industries “had a serious interest in the company,”

the

Chicago Tribune

reported,

citing a filing with the Securities and Exchange Commission. The company has agreed to be acquired by Koch for $7.19 billion.

The

Tribune

report said that early this year, brothers John and Frederick Krehbiel, who are co-chairman and controlling shareholders of Molex and both in their 70s, “also realized the need for succession planning at the company.”

A special meeting of the Molex board was held on June 3; directors discussed whether to pursue a sale, the

Tribune

article said. They decided against seeking a sale to financial buyers because, according to the firm’s advisers, “a group of financial buyers would likely have to band together to buy Molex, a process that would require input of multiple lenders and others and create concerns about confidentiality,” the article said. The board decided to pitch a sale to the firm’s competitors.

Molex officially hired the advisers, investment banking firms William Blair & Co. and BDT & Co., in early June. Because Edgar Jannotta, William Blair’s chairman, is a Molex director, the board decided that if a deal were reached, it would hire a third adviser to determine whether the deal was fair to common shareholders, the

Tribune

article said.

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BDT first discussed a potential investment in Molex with Koch on July 15, the article said. At a regularly scheduled meeting of the Molex board on Aug. 9, BDT confirmed that it had business relationships with Koch, and Molex determined that an additional adviser would be hired, the article said. It officially hired Goldman Sachs & Co. on Aug. 23.

Molex sent a draft merger agreement to Koch on Aug. 17. The parties reached an agreement on Sept. 5. The next day, Molex held a special meeting to consider the sale. Board members Jannotta, chairman of William Blair, and Don Lubin, a partner at Dentons, a law firm that also advised Molex, did not participate in the deliberations or vote on hiring either firm as advisers on the sale, the article said, citing the SEC filing. The deal was announced on Sept. 9. (Source:

Chicago Tribune,

Sept. 25, 2013.)

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