Samuel C. Johnson, majority shareholder and director of Johnson Outdoors, and his daughter, Helen Johnson-Leipold, chairman and CEO of Johnson Outdoors, have made an offer to purchase all outstanding shares of Johnson Outdoors and take it private. According to SEC documents, Ms. Johnson-Leipold currently owns 22.9% of the companys shares and Mr. Johnson owns 41.6%, either individually or under shared family control, including options to be exercised in the next 60 days.
The proposal, made public on Friday, sees the founding family offering to buy the company at $18 per share. With a total of 8.6 million shares outstanding and approximately 44% of the company controlled by non-affiliated entities, we estimate the total offer by the Johnsons to be in the neighborhood of $68 million.
Cynthia Georgeson, spokesperson for JOUT, told SEWs sister publication, The B.O.S.S. Report, that it was, “business as usual for Johnson Outdoors public or private we are still very excited and focused on running the company.” She went on to say that the Johnson Outdoors board received the proposal Friday morning and created a special committee.
“The committee has one job,” Georgeson said, “and that is to determine the fairness of this offer.”
The Committee will hire independent advisors and Mr. Johnson and Ms. Johnson-Leipold will remove themselves from the decision making process. Generally, the next step for the advisors is to market Johnson Outdoors to other potential buyers and determine if the original offer is fair. But with 56% of company shares already in the family, a takeover by another suitor seems unlikely. Ms. Johnson-Leipold and Mr. Johnson said they, “have no interest in selling their shares and will not support an alternative transaction.”
Johnson Outdoors was initially formed by the family for tax reasons. According to a local paper, JOUT was used to raise cash for family members to pay taxes on their SC Johnson household products holdings. Georgeson told BOSS the family decided in 1986 the company could function as a stand-alone entity and executed an IPO in 1987 and a secondary offering in 1988.
According to M&A sources contacted by BOSS, the offer does not appear to be high enough. Patrick Donohue, an analyst with Northland Securities, follows JOUT and told a local paper that he feels the $18 price tag is too low, indicating the stock could reach as high as $25.
Donohue, in the same report, also speculated that the Johnsons might have made the decision to take the company private now because they can break up the business and sell the divisions for much more than the $155 million, or $18 per share price tag.
Georgeson said that this is more like “wild speculation I can assure you, that public or private makes no difference to Helen Johnson-Leipolds excitement for and commitment to this company and its businesses.” Georgeson also pointed out that the proposal made by Mr. Johnson and Ms. Johnson-Leipold stated clearly that there will be, “no changes in operations resulting from the proposed transaction.”
JOUT shares closed at $19.33 on Friday, 7.4% higher than the offer price and up 14% for the week.