TT Electronics to acquire Torotel

– Combines Torotel, a Leader in Custom High Reliability Magnetics Assemblies, with TT Electronics plc, a Global Provider of Engineered Electronics for Performance-Critical Applications.

– Broadens TT’s Power Electronics Capabilities With an Expanding U.S. Footprint

Torotel, Inc. (“Torotel“) (OTC: TTLO), today announced that it has entered into a definitive merger agreement with TT Electronics plc (“TT“) for TT to acquire Torotel for $43.4 million in cash. The transaction is expected to close in the fourth calendar quarter of 2020 and is subject to the approval of Torotel’s shareholders and regulatory conditions.

Torotel specializes in the custom design, manufacture and sale of a wide variety of precision magnetic components including electro-mechanical assemblies, high voltage transformers, dry-type transformers,  toroidal coils, inductors reactors and chokes for use in equipment such as aircraft navigational equipment, digital control devices, medical equipment, avionics equipment, down-hole drilling, conventional missile guidance systems, and other defense and commercial aerospace applications.

Commenting on the transaction, Herb Sizemore, Chairman, President and CEO of Torotel, stated, “We are very excited to join TT, a global provider of engineered electronics for performance critical applications. TT has a demonstrated commitment to continued investment in power devices for the aerospace and defense markets. We see this as a great opportunity for our employees to be part of a growing dynamic company. This acquisition enhances our existing customer relationships by leveraging our shared product offering, manufacturing expertise, and engineering capabilities.”

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Terms of Transaction and Financing

TT’s $43.4 million offer results in merger consideration of $6.17 per share in cash to Torotel shareholders.  The transaction will be fully funded in cash by TT’s separately announced equity placement.

Consummation of the transaction is dependent upon approval of holders of two-thirds of Torotel’s outstanding shares and satisfaction of regulatory conditions.  In connection with Torotel’s entry into the definitive agreement, certain significant shareholders and each director and executive officer holding shares, who collectively own approximately 62% of Torotel’s outstanding shares, have signed voting agreements committing to vote their shares in favor of the transaction. Torotel will call a special meeting of its shareholders to approve the transaction and will file a Proxy Statement with the Securities and Exchange Commission in advance of the special meeting.   It is anticipated that the special meeting of Torotel’s shareholders to secure the necessary vote will be held during the fourth calendar quarter of 2020, with closing of the transaction occurring shortly thereafter.