- SigmaTron International, Inc. (NASDAQ: SGMA) and Wagz announced that they have executed a definitive agreement and plan of merger. These are the details.
SigmaTron International, Inc. (NASDAQ: SGMA), an electronic manufacturing company, and Wagz, a privately-held pet technology company, announced today that they have executed a definitive agreement and plan of merger. This follows the announcement last year on June 4, 2020, that the parties had executed a Letter of Intent (LOI) relating to a proposed business combination.
The LOI had served as a framework that led to the agreement between the two companies. And under the agreement, SigmaTron would issue 2,443,870 shares of Common Stock of SigmaTron to the shareholders of Wagz. And this would result in the stockholders of Wagz owning up to approximately 28% of SigmaTron and Wagz operating as a wholly-owned subsidiary of SigmaTron.
Currently, it is expected that the deal will close by the end of September 2021 and is subject to the achievement of certain milestones and the satisfaction of conditions by both parties prior to closing. Currently, there are no plans to raise additional capital as the projected growth is expected to be funded by SigmaTron’s available line of credit.
“While it has taken us longer than anticipated to get to this position since we first announced the LOI in June of 2020, the fundamentals driving the attractiveness of the opportunity have strengthened in the interim. The Pet Tech market has continued to grow as projected by market analysts and the pet space remains active and robust. The pandemic has increased pet ownership worldwide, creating greater opportunities for the products that fall under the Wagz strategic vision. Some of the specific drivers of the deal, including Wagz prospective customers, have changed since we first announced the deal. However, the opportunities remain as Wagz expects to launch the Wagz Freedom Smart Dog Collar ™ shortly, which will be manufactured by SigmaTron. We continue to believe that combining an Internet of Things (“IoT”) company in a growing market that provides recurring revenue opportunities with a global electronic manufacturing services company will bring value to all of our stockholders.”
“Also, as previously announced, SigmaTron plans to continue in its traditional electronic manufacturing services market and take advantage of the many opportunities it sees in that market at this time. With that said, we do believe that Wagz offers an exceptional opportunity for both companies in dynamic and growing markets.”
— Gary R. Fairhead, SigmaTron’s President and Chief Executive Officer
“Wagz continues to be attracted to SigmaTron as a way to vertically integrate our IoT opportunities, thereby allowing us to gain greater margins and better serve our market. During the past year, we have also grown our relationship to include design and engineering capabilities embedded inside of SigmaTron that will serve to help us execute our strategic vision and expand our product portfolio.”
— Terry Anderton, founder and CEO of Wagz