Minneapolis-based leisure services provider Polaris Industries Inc. said Sept. 6 that it agreed to acquire precision contract metal machining firm WSI Industries Inc. for $7.00 per share in cash, or an enterprise value of approximately $23.9 million.
The total consideration to shareholders for the transaction is $20.8 million.
Under the terms of the acquisition, expected to close in the fourth calendar quarter of 2018, subject to customary conditions, including WSI shareholder approval, the Monticello, Minn.-based company will cancel its stock option plans.
Holders of tandem stock appreciation rights and options of WSI Industries will receive a cash settlement payment equal to the difference between the options' exercise price and the price Polaris will pay for the stock, multiplied by the number of shares.
The manufacturer of power sports vehicles will fund the deal with its cash on hand and other available financial resources.
WSI will pay a fee of $0.81 million to Polaris should it terminate the agreement, while Polaris is required to pay a reverse termination fee of $1.6 million to WSI.
The transaction has been approved by the board of directors of both companies.
Upon completion of the deal, WSI will remain in its headquarters and become a distinct operation reporting into Polaris' executive vice president of global operations, Kenneth Pucel.
Lake Street Capital Markets LLC acted as financial advisor and Ballard Spahr LLP acted as legal advisor to WSI Industries. Faegre Baker Daniels LLP acted as legal advisor to Polaris.