Cerberus Capital Management, L.P.’s $183 Million Acquisition of Sparton Corporation


J.P. Morgan Securities LLC acted as financial advisor to Cerberus and Lowenstein Sandler LLP, Kirkland & Ellis LLP, and Blank Rome LLP acted as legal counsel to Cerberus. Wells Fargo Securities, LLC and Raymond James & Associates, Inc. acted as financial advisors to Sparton. Mayer Brown LLP acted as legal counsel to Sparton.

Sparton Corporation (SPA) has entered into a definitive agreement to be acquired by an affiliate of Cerberus Capital Management, L.P., a global leader in alternative investing. Under the terms of the agreement, Cerberus will acquire all outstanding shares of Sparton’s common stock for $18.50 per share in cash.

The $18.50 per share consideration represents a premium of approximately 41% over Sparton’s closing share price on December 11, 2018. The Sparton Board of Directors has unanimously approved the agreement and recommends that the Company’s shareholders approve the transaction.

The transaction, which is subject to the receipt of Sparton shareholder approval, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions, is expected to close in the first calendar quarter of 2019. Additional details regarding the transaction will be set forth in a proxy statement that will be sent by Sparton to its shareholders in advance of the special meeting at which Sparton’s shareholders will be asked to approve the transaction.

Debt financing for the transaction is being provided by accounts managed by TCW Asset Management Company, LLC and MSD Partners, L.P.

Lowenstein Sandler advised Cerberus Capital Management, L.P. with a team including Robert G. Minion (Picture), Marita A. Makinen, Sabrina Cua, Matthew Tippy, Lauren E. Killeen, Lauren M. Troeller (M&A), Jeffrey Blumenfeld, Jack Sidorov, Jeffrey M. Shapiro (Antitrust), Matt Savare, Nicholas G. Mehler, Bryan Sterba (IP&IT), Stuart S. Yusem, Alex H. Rosenthal (Real Estate), Christine Osvald-Mruz, Megan Monson (Employee Benefits & Executive Compensation), Norman W. Spindel, Allison Gabala (Environmental), Michael Walutes (Tax), James C. Shehan (FDA Regulatory), Mary J. Hildebrand and Manali Joglekar (Privacy & Cybersecurity).

Mayer Brown represented Sparton Andrew Noreuil and Fritz Thomas (both Chicago); Corporate & Securities –associates Ryan Ferris, Elizabeth Gore (both Chicago) and Michael Gomez (Northern California); Litigation & Dispute Resolution – partners Scott Perlman and Marcia Madsen and counsel Luke Levasseur (all DC), Maritoni Kane and Jaimy Hamburg (both Chicago) and associate Oral Pottinger (DC); Intellectual Property – partner Rich Assmus (Chicago); Tax Transactions & Consulting – partner Jim Barry and associate Chris Odell (both Chicago); Employment & Benefits – partner James Williams (Chicago); Government and Global Trade – partner Tamer Soliman and counsel JC Lowe (both DC); and Real Estate – counsel Bob Morgan (Houston).

Involved fees earner: Robert Minion – Lowenstein Sandler LLP; Marita Makinen – Lowenstein Sandler LLP; Sabrina Cua – Lowenstein Sandler LLP; Matthew Tippy – Lowenstein Sandler LLP; Lauren Killeen – Lowenstein Sandler LLP; Lauren Troeller – Lowenstein Sandler LLP; Jeffrey Blumenfeld – Lowenstein Sandler LLP; Jack Sidorov – Lowenstein Sandler LLP; Jeffrey Shapiro – Lowenstein Sandler LLP; Matt Savare – Lowenstein Sandler LLP; Nicholas Mehler – Lowenstein Sandler LLP; Bryan Sterba – Lowenstein Sandler LLP; Stuart Yusem – Lowenstein Sandler LLP; Alex Rosenthal – Lowenstein Sandler LLP; Christine Osvald-Mruz – Lowenstein Sandler LLP; Megan Monson – Lowenstein Sandler LLP; Norman Spindel – Lowenstein Sandler LLP; Allison Gabala – Lowenstein Sandler LLP; Michael Walutes – Lowenstein Sandler LLP; James Shehan – Lowenstein Sandler LLP; Mary Hildebrand – Lowenstein Sandler LLP; Manali Joglekar – Lowenstein Sandler LLP; Andrew Noreuil – Mayer & Brown; Frederick Thomas – Mayer & Brown; Ryan Ferris – Mayer & Brown; Elizabeth Gore – Mayer & Brown; Michael Gomez – Mayer & Brown; Scott Perlman – Mayer & Brown; Oral Pottinger – Mayer & Brown; Marcia Madsen – Mayer & Brown; Richard Assmus – Mayer & Brown; James Barry – Mayer & Brown; Christopher Odell – Mayer & Brown; Maritoni Kane – Mayer & Brown; James Williams – Mayer & Brown; Robert Morgan – Mayer & Brown; Luke Levasseur – Mayer & Brown; Jaimy Hamburg – Mayer & Brown; Tamer Soliman – Mayer & Brown; Jeffery Lowe – Mayer & Brown;

Law Firms: Lowenstein Sandler LLP; Mayer & Brown;

Clients: Cerberus Capital Management, L.P.; Sparton Corp;

Author: Ambrogio Visconti