Mill Road Capital Increases Acquisition Proposal for Huttig Building Products in New Letter
Chairman of the Board of Directors
Huttig Building Products, Inc.
555 Maryville University Drive, Suite 400
St. Louis, MO 63141
Re: Acquisition Proposal for Huttig Building Products, Inc.
Dear Mr. Tanner:
Mill Road Capital Management LLC and its affiliated funds (“Mill Road”) are pleased to present this proposal for the acquisition of Huttig Building Products, Inc. (“Huttig” or the “Company”). As you know, Mill Road is one of the largest shareholders of Huttig with ownership of 8.1% of the Company’s outstanding shares. We hope that the Board of Directors finds this improved proposal compelling for the Company’s shareholders.
Based on our review of publicly available information to date, Mill Road proposes to acquire 100% of the outstanding shares of the Company not already owned by Mill Road for $4.00 per share which represents a premium of 142% over the Company’s closing share price on August 6th, the date we submitted our prior proposal. The purchase price would be payable in cash.
Due Diligence and Timing
Given our familiarity with the Company and significant experience executing going-private transactions, we believe we can complete customary business, accounting, and legal due diligence and negotiate definitive documentation within 45 days.
Our proposal is contingent on 1) receiving a 45 day period of exclusivity, 2) confirming that the Company’s current COVID-impacted annualized earnings power is at least as high as its earnings power immediately prior to the onset of the COVID-19 pandemic, and 3) completing our customary due diligence.
Mill Road anticipates the proposed transaction will be funded through a combination of third party debt and equity capital provided by Mill Road. We have ample equity capital to complete the transaction and are highly confident in our ability to raise an appropriate amount of debt financing.
Obligations and Approvals
This proposal is not legally binding. Binding legal obligations of Mill Road and the Company will be created only through execution and delivery of definitive agreements. Mill Road does not require any outside approvals to complete a transaction (other than such approvals and/or expirations of waiting periods as may be required under applicable antitrust or other laws).
Overview of Mill Road
Mill Road is a private investment firm which has raised approximately $900 million in aggregate committed equity capital. Our limited partners include a prominent and highly respected group of state pension funds, foundations, endowments and insurance companies. Our team is comprised of a core group of former Blackstone professionals who have successfully completed several dozen control transactions with a cumulative transaction value of several billion dollars.
If you have any questions, please feel free to contact me directly at (203) 987-3505. I look forward to discussing at your earliest convenience.
Mill Road Capital Management LLC
Justin C. Jacobs
Management Committee Director