Steel Connect’s Audit Committee Approves Short-Form Merger with Steel Partners

On November 27, 2024, Steel Connect, Inc. (NASDAQ: STCN) announced that its Audit Committee, under its Board of Directors, approved a Short-Form Merger transaction with Steel Partners Holdings L.P., a Delaware limited partnership. This transaction involves an as-converted discussion, where an indirect, wholly-owned subsidiary of Steel Partners will merge with and into Steel Connect under Section 253 of the Delaware General Corporation Law. The outcome will see Steel Connect becoming an indirect wholly-owned subsidiary of Steel Partners.

The approval by the Audit Committee, done after consultations with legal and financial advisors, is outlined in the stockholders’ agreement dated April 30, 2023, between Steel Partners and certain stockholders and Steel Connect. The Short-Form Merger stipulates several conditions, including:

– Holders of Common Stock (excluding certain parties) will receive $11.45 in cash per share.
– Additional agreements will be in place for distribution regarding the Reith Net Litigation Proceeds.
– All outstanding restricted stock awards will be fully vested before the Effective Time.
– The process will adhere to the requirements under Rule 13e-3 of the Securities Exchange Act of 1934.

Moreover, a Contingent Value Rights Agreement will be established in case the Reith Net Litigation Proceeds are not distributed pre-merger. The Reith Net Litigation Proceeds will signify the compensation, penalties, interest, and other damages recovered due to the Reith Litigation.

Notably, upon the consummation of the Short-Form Merger, the Common Stock of Steel Connect will cease to be quoted on the NASDAQ Stock Market, making it eligible for deregistration.

This agreement outlines provisions for indemnification, expenses, and various procedural matters. Financial filings and relevant documents will be available to investors through the SEC or Steel Connect’s website. The Company aims to comply with necessary financial and legal standards post-merger.

The CVR Agreement is attached to the filing in accordance with the discussed terms between the involved parties. The completion of this transaction brings forth strategic changes for both Steel Connect and Steel Partners, aligning with their future growth plans and legal standards.

Please follow upcoming communications and SEC filings for further updates on this merger between Steel Connect and Steel Partners.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Steel Connect’s 8K filing here.

About Steel Connect

Steel Connect, Inc, together with its subsidiaries, provides supply chain services in the United States, Mainland China, Netherlands, and internationally. It offers product configuration and packaging, kitting, and assembly of components and parts into finished goods; and value-added processes, such as product testing, radio frequency identification tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services.