ROYAL OAK — The board of a small publicly held company in Royal Oak that markets an alternative to heat treating metals to strengthen them has accepted a buyout offer of 86 cents a share.
Bonal International Inc. (OTC: BONL) announced the deal with DePierre Management & Manufacturing LLC Friday afternoon.
However, the deal raises questions, since the buyout price — 86 cents a share, plus a promised dividend to shareholders of 20 to 30 cents a share — is well below Bonal’s Friday closing price of $2 a share.
Bonal has about 1.7 million shares of stock outstanding.
Under the agreement and plan of merger, which Bonal said was unanimously approved by its board Feb. 1, DiPierre Management & Manufacturing will acquire 100 percent ownership of Bonal International Inc. in exchange for 86 cents a share.
The announcement also said that the Bonal board “currently contemplates a dividend will be issued to stockholders simultaneous with the consummation of the merger. The dividend amount has not yet been determined because all company expenses of the merger will have to be paid first, but the board of directors currently contemplates the dividend will be approximately between $0.20-0.30 per share.”
DePierre Management & Manufacturing is led by Rob DePierre, former CEO of Henniges Automotive and former president of North American operations for Benteler Automotive. According to DePierre’s LinkedIn profile, “DePierre Management and Manufacturing (DMM) was established in 2011 as the base company for advising small to middle market domestic and global companies owned either by individuals or by private equity groups on operational excellence. In addition, DMM sets out to acquire small manufacturing companies (< $10 million annual revenue) and provides hands-on management for realizing revenue and profit growth. DMM companies are planned to be synergetic with one another to accommodate larger programs through potential working agreements.”
Final consummation of the merger requires the approval of Bonal stockholders. The company said it is preparing a stockholder proxy statement, which should be mailed in the next two weeks to stockholders of record as of Feb. 13. The stockholder meeting to vote on the deal is currently targeted for mid-March, with the exact date to be announced in the company’s proxy statement.
On Nov. 29, Bonal reported revenue of $1.16 million in the first six months of its fiscal year ended Sept. 30, down from $1.24 million a year earlier. Net income for the six months was $237,162 or 14 cents a share, down from $265,154 or 15 cents a share in the same period of the prior fiscal year. The second quarter, however, saw sharply higher business, with revenue of $747,048, up from $672,651 a year earlier, and net income of $201,196 or 12 cents a share, up from $176,700 or 10 cents a share in the second quarter of the prior fiscal year.
Separately, Thomas E. Hebel and Paul Y. Hebel have resigned from the board of directors of Bonal International. The company’s board of directors has also relieved Thomas E. Hebel from his duties as acting Interim President. Thomas E. Hebel remains an employee of the company, serving as vice president of marketing. A. George Hebel III, past president and CEO and current chairman of the board of directors, has been appointed interim president, effective immediately.
Bonal International, through its subsidiary Bonal Technologies Inc., provides sub-harmonic vibratory stress relief and weld conditioning technology. Bonal serves the aerospace, armament, automotive, petroleum, die casting, mining, racing, machine tool building, mold making, ship building, and welding industries. Bonal’s patented Meta-Lax technology is used for eliminating thermal stress in metal parts, thereby preventing warping and cracking, at a fraction of the time, energy, and monetary costs of competing technologies.
More information can be found at www.Bonal.com or by calling 1-800-Meta-Lax.