International Electronics Inc. (IEI), which has been courted by companies such as Risco while it was fairly publicly for sale, has decided to go with courtier Linear LLC, a division of Nortek. IEI announced it was in a "definitive merger agreement" to be acquired by Linear.
The offer for the IEI common stock was $6.65 per share, significantly more than Risco's recent unsolicited offer of $4 per share. Linear's offer comes near the end of this month, and will stand for 20 business days to allow IEI to respond. IEI is a public company traded under the stock symbol of IEI on the OTCBB (Over the Counter Bulletin Board). The stock has seen strong gains over the last year, from when it was hovering around $2.00 per share. As recent as March, the stock was valued around $3.00 a share. Since the merger agreement has been announced, the stock price has risen above $6 per share.
The potential buy would link IEI, which produces a variety of commercial access control products with Linear, which offers a number of products in the residential security and automation space, as well as building and gate access control systems like those used at entrances to gated communities and high-end apartment complexes.
According to John Murzycki, IEI's senior marketing manager, this offer from Linear/Nortek is coming across very positively.
"The feeling here is that this is a very positive agreement for both companies, as well as our customers and shareholders," Murzycki said. "What we are hearing from others is that Linear is a very professional organization."
Murzycki added that Linear has an access product line that doesn't compete directly with IEI's offerings. "There are a lot of opportunities for synergy that would exist [if the merge is completed]."
Chuck Stevens, the V.P. of marketing for Linear, agrees. He noted that there's not a great deal of overlap.
"Our access control line has primarily been in the realm of telephone entry systems and community access control used for perimeter security," said Stevens. "We have systems from full-featured community access control that do event logs to the simple telephone-only systems that just help users get people through the gates. On the other hand, IEI is known for leading the market in general purpose keypads, and they also have their [eMerge] IP-based access control system, which is something unique that we [Linear] don't have."
Stevens noted that companies acquired by Linear usually aren't merged and rebranded, but often operate as almost-standalone entities under the Linear and Nortek umbrella.