Velocity One, a newly formed aerospace manufacturing holding
company, announced today it has signed a merger agreement with
EMCORE Corporation (Nasdaq: EMKR) (“EMCORE”), a provider of
inertial navigation solutions to the aerospace and defense
industry. Under the agreement, EMCORE will become a wholly owned
subsidiary of Velocity One. The purchase price of $3.10 per share
in cash, backed by Charlesbank Capital Partners (“Charlesbank”), a
private investment firm with more than $22 billion of total
assets*, has been unanimously approved by the EMCORE board of
directors.
Velocity One will now have three industry leaders operating
under its wing. In addition to EMCORE, it will comprise Cartridge
Actuated Devices, Inc. (“CAD”), a 50-year veteran designer and
manufacturer of energetic devices, and Aerosphere Power, a
manufacturer of power system solutions for commercial and military
aerospace, military ground vehicles, and UAV applications.
“We are excited to bring our playbook to EMCORE, as well as
decades of experience operating aerospace and defense manufacturing
and engineering businesses and optimizing their efficiency and
profitability,” said John Borduin, CEO of Velocity One. “EMCORE has
excellent technology and offers a large product portfolio. We
believe this, combined with our industry experience and shared
customer portfolio, puts EMCORE on a new trajectory for growth.
With Charlesbank’s investment, EMCORE, CAD, and Aerosphere Power’s
businesses can align and be poised for growth while focusing on our
collective core philosophies.”
“We see a tremendous opportunity to bring together three leading
aerospace manufacturing businesses to create a compelling new
player in the market, and EMCORE’s highly engineered proprietary
products will be key to driving the platform’s overall success,”
said Brandon White, Managing Director at Charlesbank. “Velocity
One’s talented and motivated management team has the industry
expertise, entrepreneurial talent, and reputation necessary to
drive meaningful growth at scale, and we remain excited to partner
closely with them to execute our shared vision for the future of
each business.”
Matt Vargas, CEO of EMCORE said, “This merger underscores our
commitment to our domestic and international customer base,
including strengthening relationships with and generating synergies
across a range of high-priority U.S. and NATO defense programs and
industrial partners served by all three companies. By combining our
strengths with those of Velocity One, we believe EMCORE will be
better positioned and resourced to address global customers’
evolving needs and deliver superior solutions. We look forward to
the future as part of the Velocity One team.”
*Figure as of 6/30/24. Total assets reflects the total of (1)
the fair market value (FMV) of investments held by the funds,
including all related vehicles; (2) the FMV of investments held by
entities included in the Fund IX Overage Program; (3) uncalled
committed capital for each fund or related investment vehicle; (4)
the FMV of investments held by third-party investors in
Charlesbank-sponsored co-investment vehicles, including uncalled
committed capital for such vehicles; and, (5) uncalled committed
leverage available to the Charlesbank Credit funds.
Advisors
Skyway Capital Markets, LLC and Launch Point Partners LLC are
acting as buyside financial advisors to Velocity One. Foley &
Lardner LLP is serving as legal counsel to Velocity One.
Craig-Hallum Capital Group LLC is acting as exclusive financial
advisor to EMCORE, and Pillsbury Winthrop Shaw Pittman LLP is
serving as legal counsel to EMCORE.
About Velocity One
As a newly formed aerospace and defense platform, Velocity One
brings together EMCORE, Cartridge Actuated Devices, and Aerosphere
Power, all committed to delivering cutting-edge solutions and
exceptional performance. This strategic combination positions
Velocity One as a global leader in aerospace and defense, enabling
the company to capture new opportunities, strengthen its market
position, and expand its shared customer base. Visit Velocity One
at www.velocity-one.com
About EMCORE
EMCORE Corporation is a leading provider of inertial navigation
products for the aerospace and defense markets. EMCORE leverages
industry-leading Photonic Integrated Chip (PIC), Quartz MEMS, and
Lithium Niobate chip-level technology to deliver state-of-the-art
component and system-level products across our end-market
applications. EMCORE has vertically-integrated manufacturing
capability at its facilities in Budd Lake, NJ, Concord, CA, and
Tinley Park, IL. EMCORE’s manufacturing facilities all maintain ISO
9001 quality management certification, and the company is AS9100
aerospace quality certified at its facilities in Budd Lake and
Concord. For further information about EMCORE, please visit
https://www.EMCORE.com
About Charlesbank
Based in Boston and New York, Charlesbank Capital Partners is a
middle-market private investment firm with more than $22 billion of
total assets.* Charlesbank focuses on management-led buyouts,
growth capital financings, opportunistic credit, and technology
investments. The firm seeks to invest in companies with sustainable
competitive advantage and excellent prospects for growth. For more
information, please visit www.charlesbank.com
Additional Information and Where to Find It
In connection with the proposed transaction among EMCORE
Corporation (“EMCORE” or the “Company”), Velocity One Holdings, LP,
Aerosphere Power Inc., and Velocity Merger Sub, Inc. (the “Proposed
Transaction”), the Company will file relevant materials with the
Securities and Exchange Commission (the “SEC”), including the
Company’s proxy statement on Schedule 14A (the “Proxy Statement”).
This press release is not a substitute for the Proxy Statement or
any other document that the Company may file with the SEC or send
to its shareholders in connection with the Proposed Transaction.
Before making any voting or investment decisions, investors and
security holders of the company are urged to read carefully and in
their entirety all relevant documents filed or that will be filed
with the SEC, including the proxy statement, as well as any
amendments or supplements thereto, in connection with the proposed
transaction when they become available because they contain or will
contain important information about the company, the proposed
transaction, and related matters. Investors and security holders
will be able to obtain free copies of such documents (when
available) through the website maintained by the SEC at
http://www.sec.gov, or by visiting the Company’s website at
www.emcore.com or by contacting the Company by email at
legal@emcore.com.
Participants in the Solicitation of Proxies
The Company and certain of its directors and executive officers
may be deemed to be participants in the solicitation of proxies in
respect of the Proposed Transaction. Information about the
directors and executive officers of the Company is set forth in:
(i) the Company’s proxy statement for its 2024 annual meeting of
shareholders under the heading “Proposal 1” (including “Election of
Directors,” “Election of Directors—Recommendation of the Board of
Directors,” “Election of Directors—Director Compensation for Fiscal
Year 2023,” “Compensation Discussion and Analysis,” “Executive
Compensation,” and “Ownership of Securities—Security Ownership of
Certain Beneficial Owners and Management”), which was filed with
the SEC on January 26, 2024 and is available at
https://www.sec.gov/Archives/edgar/data/808326/000119312524016707/d561983ddef14a.htm;
(ii) the Company’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2023, including under the headings “Item 10.
Directors, Executive Officers and Corporate Governance,” “Item 11.
Executive Compensation,” “Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters,”
and “Item 13. Certain Relationships and Related Transactions, and
Director Independence,” which was filed with the SEC on December
27, 2023 and is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000808326/000080832623000031/emkr-20230930.htm;
and (iii) to the extent holdings of the Company’s securities by its
directors or executive officers have changed since the amounts set
forth in the Company’s proxy statement for its 2024 annual meeting
of shareholders, such changes have been or will be reflected on
Initial Statement of Beneficial Ownership of Securities on Form 3,
Statement of Changes in Beneficial Ownership on Form 4, or Annual
Statement of Changes in Beneficial Ownership of Securities on Form
5, filed with the SEC (which are available at EDGAR Search Results
https://www.sec.gov/edgar/search/#/category=form-cat2&ciks=0000808326&entityName=EMCORE%2520CORP%2520(EMKR)%2520(CIK%25200000808326)).
Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Proxy Statement and other relevant materials to be filed with
the SEC regarding the Proposed Transaction when such materials
become available. Investors should read the Proxy Statement
carefully when it becomes available before making any voting or
investment decisions. Copies of the documents filed with the SEC by
the Company will be available free of charge through the website
maintained by the SEC at www.sec.gov. Additionally, copies of
documents filed with the SEC by the Company will be available free
of charge on the Company’s website at www.emcore.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended related to the Company and the Proposed Transaction. All
statements other than statements of historical fact are
forward-looking statements for purposes of federal and state
securities laws. These forward-looking statements involve risks and
uncertainties that could significantly affect the financial or
operating results of the Company. These forward-looking statements
may be identified by terms such as “anticipate,” “believe,” “can,”
“could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,”
“may,” “plan,” “project,” “should,” “target,” “will,” and “would”
and the negative of these terms or other similar expressions.
Forward-looking statements in this press release include, among
other things, statements about the potential benefits of the
Proposed Transaction, including future plans, objectives,
expectations, and intentions, such as uniting industry leaders and
creating an emerging force in the aerospace and defense industry,
creating growth, driving success, and positioning and resourcing
EMCORE to address customers’ needs and deliver solutions; and the
structure of the Proposed Transaction. These forward-looking
statements involve substantial risks and uncertainties that could
cause actual results, including the actual results of the Company
to differ materially from those expressed or implied by such
statements. These risks and uncertainties include, among other
things, risks related to the possibility that the conditions to the
consummation of the Proposed Transaction will not for any reason be
satisfied (including the failure to obtain the approval of the
merger agreement for the Proposed Transaction (the “Merger
Agreement”) by the Company’s shareholders) in the anticipated
timeframe or at all; risks related to the ability to realize the
anticipated benefits of the Proposed Transaction; the ability to
retain and hire key personnel; negative effects of the announcement
or failure to consummate the Proposed Transaction on the market
price of the capital stock of the Company and on the Company’s
operating results, including that the Company’s stock price may
decline significantly if the Proposed Transaction is not
consummated; the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger
Agreement, which in certain circumstances may require the Company
to pay a termination fee; significant transaction costs, fees,
expenses and charges; operating costs, customer loss, and business
disruption (including, without limitation, difficulties in
maintaining employee, customer, or other business, contractual, or
operational relationships following the Proposed Transaction
announcement or closing of the Proposed Transaction and the
diversion of the attention of the Company management from its
ongoing business); failure to consummate or delay in consummating
the Proposed Transaction for any reason; risks related to the
Company’s ability to manage existing cash resources for operations
and continue as a going concern; risks and uncertainties related to
sales of the Company’s businesses, assets, and product lines, and
unanticipated adverse effects or liabilities from such
divestitures; risks related to restructuring activities, including
any resulting disruptions to the Company’s operations, and costs
and expenses incurred, and resulting operational cost savings
arising, in connection therewith; the Company’s ability to
remediate the material weakness in its internal controls over
financial reporting and its identification of any other material
weakness that may adversely affect the accuracy and timing of the
Company’s financial reporting; the rapidly evolving markets for the
Company’s products and uncertainty regarding the development of
these markets; dependence on customers or other third parties;
difficulties in commercializing new products, including delays and
the failure of new products to perform as expected, to be
manufactured at acceptable volumes, yields, and cost, to be
qualified and accepted by the Company’s customers, and to
successfully compete with products offered by competitors;
uncertainties concerning the availability and cost of commodity
materials and externally-made specialized product components;
actions by competitors; risks and uncertainties related to laws,
regulations, and legal proceedings, including litigation matters
relating to the Proposed Transaction or otherwise impacting the
Company generally, including the nature, cost, and outcome of any
litigation and other legal proceedings related to the Proposed
Transaction that may be instituted against the parties and others
following the announcement of the Proposed Transaction;
acquisition-related risks; risks related to the conversion of order
backlog into product revenue and the timing thereof; risks related
to the financing of the Proposed Transaction; economic changes in
global markets, such as inflation and interest rates, and
recession; government policies (including policy changes affecting
the technology and aerospace and defense industries, taxation,
trade, tariffs, immigration, customs, and border actions) and other
external factors that the Company cannot control; risks related to
intellectual property, privacy matters, and cyber security
(including losses and other consequences from failures, breaches,
attacks, or disclosures involving information technology
infrastructure and data); other business effects (including the
effects of industry, market, economic, political, or regulatory
conditions); and other risks and uncertainties, including, but not
limited to, those described in the Company’s Annual Report on Form
10-K on file with the SEC and from time to time in other filed
reports including the Company’s Quarterly Reports on Form 10-Q.
A further description of risks and uncertainties relating to the
Company can be found in its most recent Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K,
all of which are filed with the SEC and available at
www.sec.gov.
There can be no assurance that the Proposed Transaction will in
fact be consummated. If the Proposed Transaction is consummated,
the Company’s shareholders will cease to have any equity interest
in the Company and will have no right to participate in its
earnings and future growth. The Company cautions investors not to
unduly rely on any forward-looking statements, which speak only as
of the date thereof. The Company does not intend to update or
revise any forward-looking statements as the result of new
information or future events or developments, except as required by
law.
CONTACTS
For Velocity One:Julia McDowellinfo@velocity-one.com
For EMCORE:Tom Minichiello, Chief Financial
Officerinvestor@emcore.com
For Charlesbank:Ryan FitzGibbon / Alexa Ottenstein / Peter
GavarisProsek Partnerspro-charlesbank@prosek.com
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