Lineage Will Acquire Cherokee

Oct 8, 2008 12:49 PM

Tustin, Calif-based Cherokee International has announced that it has entered into a definitive merger agreement with Lineage Power Holdings, a Gores Group company, under which Lineage will acquire all of the outstanding shares of Cherokee International. Under the terms of the agreement, stockholders of Cherokee International will receive $3.20 per share of common stock held, in an all cash transaction, representing an aggregate enterprise value of approximately $105 million.

The transaction has been unanimously approved by the board of directors of Cherokee International, and certain stockholders have agreed to vote their Cherokee International shares in favor of the transaction. The transaction is subject to the approval of Cherokee International’s stockholders and to regulatory approvals. The companies anticipate that the transaction will be completed in the fourth calendar quarter of 2008.

“We believe the sale of Cherokee to Lineage will add value and scale for our customers,” says Jeffrey Frank, Cherokee’s president and chief executive officer. “Over the past 30 years, Cherokee has earned a great reputation for our strong engineering team, manufacturing, quality and responsiveness, all of which come down to our outstanding employees and our focus on the customer.”

According to Ryan Wald, Managing Director of The Gores Group, Cherokee will become a division of Lineage and will continue to be a leader in the custom power solutions marketplace.

The Gores Group is a private equity firm focused on acquiring controlling interests in mature and growing businesses which can benefit from the firm's operating experience and flexible capital base. Lineage Power, the Mesquite, Texas-based provider of ac-dc and dc-dc power converters, was formerly Tyco Electronics Power Systems and is now a standalone company owned by the Gores Group.