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 THE RESULT: Caymus Partners provided the board of directors of Lynch Corporation (AMEX: LGL) (“Lynch Corp.” or the “Company”) an opinion as to the fairness to shareholders of a proposed private investment in the Company’s public equity (“PIPE”). The opinion was provided to ensure that the price of Company stock sold to the PIPE investor was fair to existing shareholders. The PIPE transaction was undertaken in order to fund the Company’s acquisition of Piezo Technology, Inc., a manufacturer of electronic equipment. Caymus Partners presented to Lynch Corp.’s board of directors a summary of the PIPE transaction, the terms of the pending investment, and a detailed overview of the valuation methodologies employed. Caymus Partners reviewed the transaction terms, determined a valuation range of the transaction and provided an independent fairness opinion letter.
"Caymus Partners played a significant role in our recently completed PIPE transaction. They reacted quickly with accurate and high quality analyses that helped the board review, analyze and approve this much needed transaction. They did an outstanding job in understanding the transaction, its intricacies and the financial implications to the Company and our shareholders . They exceeded our expectations and I would highly recommend them."
John C. Ferrara, CPA, President & CEO
Lynch Corporation
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Company Description
Lynch Corp. operates as the holding company for three subsidiaries, Lynch Systems, Piezo Technology Inc. and M-tron Industries Inc. The subsidiaries manufacture (i) equipment used in the manufacturing of electronic display and consumer glass industries, and (ii) custom electronic components, including frequency control devices and crystal oscillators, used in telecommunications applications.
Client Objective
Lynch Corp. sought an independent opinion as to the fairness to existing shareholders of a pending private investment by Venator Merchant Fund in the Company’s common stock.
Caymus Partners Process
As part of the fairness opinion and valuation process, Caymus Partners undertook the following:
- Review of Transaction. Caymus Partners performed a comprehensive review of the transaction, the terms of the offer and the value per share;
- Determination of Valuation Range. Caymus Partners determined a valuation range of the transaction using a number of different methodologies (comparable companies, comparable transactions, discounted cash flow, and PIPE transactions analysis);
- Fairness Opinion Presentation. Caymus Partners prepared a comprehensive informational package to the board of directors with a detailed overview of the transaction, the valuation methodologies employed and the recommended valuation range of the transaction; and
- Discussions with Board and Management. Caymus Partners discussed the analysis with the Company’s board of directors and senior management team and provided additional analyses on an as-needed basis.
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