Cemtrex abandons attempt to acquire West Coast company twice its size
Cemtrex CEO Saagar Govil said it's customary for microcap public companies to pay a modest sum for research coverage. Credit: Heather Walsh
Cemtrex Inc., a Farmingdale-based provider of industrial and manufacturing services, has ended its pursuit of a much larger West Coast company.
Last week Cemtrex withdrew a request to register securities that it planned to use to acquire Key Tronic Corp., based in Spokane Valley, Washington.
Cemtrex made its initial offer for Key Tronic in September 2017, proposing a one-for-one exchange of its roughly $3 common stock for the approximately $7 shares of Key Tronic Corp.
In March, however, Cemtrex turned its attention to a fellow Long Island company, acquiring a 46 percent stake in Hauppauge-based Vicon Industries Inc., a maker of video surveillance equipment and software.
“We decided to move on from KTCC since we have moved forward with Vicon,” Cemtrex president and chief executive Saagar Govil said in an e-mail Friday. KTCC is the ticker symbol of Key Tronic.
After acquiring the Vicon stake, Govil was named that company’s CEO and chairman.
At the time of the Cemtrex offer, Key Tronic had more than double the market capitalization and more than four times the revenue of Cemtrex, and the Spokane company’s management dismissed the Cemtrex offer.
Cemtrex CEO Saagar Govil said quarterly sales were down due to a weakness in global environmental markets. Credit: Heather Walsh
The following month, Cemtrex made a revised offer of debt and stock that it valued at $11 per share, but that proposal also failed to gain traction.
Shares of Cemtrex were unchanged Monday at $2.84. A year ago they closed at $3.25.
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
