Mirror maker Donnelly Corp. had plans to go it alone, until Magna International Inc. came calling last spring.
Magna, of Aurora, Ontario, also had an automotive mirrors unit but was having difficulty expanding the business in the shadow of Donnelly, of Holland, Mich., and other auto mirror makers. That encouraged Magna to begin talks with Donnelly, said Frank OBrien, Donnellys vice president of corporate development.
Those discussions led to the Tuesday, June 25, announcement that Magna would acquire Donnelly in a deal valued at $415 million $320 million in a stock swap and $95 million in the assumption of Donnelly debt. Both companies said they expect the deal to be complete by late September.
Magna said it already has reached agreements in favor of the merger with Donnelly shareholders representing 72 percent of the total shareholder votes.
Under the deals terms, for each share of Donnelly stock, Magna will give a fraction of a Magna Class A share of stock equivalent to $28. But the offer is contingent on the average price of the Magna Class A shares ranging between $61 and $80 per share for the 20 trading days prior to the second day before the deal closes. The stock was trading in the $69 range on Friday, June 28.
The new entity, Magna Donnelly, will become a wholly owned subsidiary of Magna and will be run by Dwane Baumgardner, Donnellys chairman. It will have projected annual sales of $1.2 billion. Magna Donnelly will include both companies mirror groups and Donnellys nonmirror business, including door handles and glass and plastic window enclosure systems. Magna Donnellys headquarters has not been announced.