Pinnacle Electronics was purchased in 2001 by Main Street Capital and Management. The Company had grown significantly since the purchase and had paid down debt despite being in an industry that was hit hard by the recession. The Board of Directors wanted to review strategic alternatives including a divestiture, recapitalization, acquisition strategy and status quo alternative. The CEO desired to cash out his equity interest and exit the business while other Management wanted to remain employed and stay in Pittsburgh.
Strategic Advisors presented to the Board of Directors an analysis of all the strategic alternatives that showed the value created to the shareholders under each alternative and also determined a valuation range based upon selling the Company to both a financial or strategic buyer.
Based upon the analysis, the Board of Directors decided to divest and engaged Strategic Advisors to run a confidential sale process targeted both strategic and financial buyers. Pinnacle was sold for $43MM to LaBarge, Inc. a public company headquartered in St. Louis, MO at the high end of its valuation range. The CEO exited the Company, the business remained in Pittsburgh and existing Management remained with LaBarge, Inc.
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