Servotronics Responds to Star Equity's Communication
Servotronics, Inc. (NYSE American – SVT) a designer and manufacturer of servo-control components and other advanced technology products today responds to recent claims from Star Equity Holdings, Inc. ("Star Equity") about its indication of interest to combine with Servotronics.
Beginning in July 2022 the Servotronics Leadership Team has been developing a strategic plan designed to increase long-term shareholder value that is focused on strengthening the corporate culture, delivering quality products on time, growing the business in existing and new markets, and investing in the Company and employees. This plan was presented to the Board of Directors and approved in mid-October. The Board and Leadership Team believe that the actions taken as a result of these efforts will provide considerable value to all stakeholders. Of note, the Indication of Interest from Star Equity was received on October 20, 2022, one day after the Board reviewed and approved the strategic plan.
Following receipt of the Indication of Interest from Star Equity, the Servotronics Board conducted a careful and thorough review of the matter. Multiple special meetings with the full Board were held in which relevant information was gathered and reviewed. In addition, the Officers, additional Management Team members and external advisors were consulted. Following this thorough review, the Servotronics Board of Directors responded to Star Equity on November 2, 2022 by noting that "the Board unanimously concluded that a potential transaction as referenced in the indication of interest carries significant risks and is not in the best interests of our shareholders."
Additionally, the Company has endeavored to improve its investor relations program through more frequent and transparent communications. As part of this effort, the Servotronics CEO sent an open letter to stakeholders on November 1 following the Board's approval of the Company's strategic direction. This letter outlined the Company's strong foundation for long-term value generation, governance changes designed to increase stakeholder confidence, and commitment to further investment in both the Company and its employees. Further updates on the strategic plan and its execution are anticipated beginning in early 2023. These communications, which were in process well before Star Equity's unsolicited letter, will allow for meaningful updates and increased transparency to all stakeholders.
Furthermore, earlier this year the six-person Servotronics Board of Directors saw the appointment of a new CEO, two new independent directors, and a non-executive Board Chair. This group understands its responsibility to the shareholders and believes it exercised its fiduciary duties fairly and appropriately in this matter.
At this time the Board of Directors and Management team of Servotronics are committed to executing on the Company's plan of delivering superior long-term results to shareholders.
ABOUT SERVOTRONICS
The Company is composed of two groups – the Advanced Technology Group (ATG) and the Consumer Products Group (CPG). The ATG primarily designs, develops and manufactures servo controls and other components for various commercial and government applications (i.e., aircraft, jet engines, missiles, manufacturing equipment, etc.). The CPG designs and manufactures cutlery, bayonets, pocket knives, machetes and combat knives, survival, sporting, agricultural knives and other edged products for both commercial and government applications.
FORWARD-LOOKING STATEMENTS
This news release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this release, the words "project," "believe," "plan," "anticipate," "expect" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve numerous risks and uncertainties which may cause the actual results of the Company to be materially different from future results expressed or implied by such forward-looking statements. There are a number of factors that will influence the Company's future operations, including: uncertainties in today's global economy, including political risks, adverse changes in legal and regulatory environments, and difficulty in predicting defense appropriations, the introduction of new technologies and the impact of competitive products, the vitality of the commercial aviation industry and its ability to purchase new aircraft, the willingness and ability of the Company's customers to fund long-term purchase programs, and market demand and acceptance both for the Company's products and its customers' products which incorporate Company-made components, the Company's ability to accurately align capacity with demand, the availability of financing and changes in interest rates, the outcome of pending and potential litigation, the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses' and governments' responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers' businesses, and on global supply chains, the ability of the Company to obtain and retain key executives and employees and the additional risks discussed in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's analysis only as of the date hereof. The Company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.
SERVOTRONICS, INC. (SVT) IS LISTED ON NYSE American
SOURCE Servotronics, Inc.