STAR EQUITY HOLDINGS, INC.: M&A transaction — Star Equity acquires Timber Technologies for $23M in engineered wood products deal

STAR EQUITY HOLDINGS, INC.

Purchase price $23M: $16M upfront cash, $4M deferred cash, $3M earn-out (50% cash, 50% preferred stock).
Separate real estate for $3M expected to close June 2024 via seller note at 7.5% over 10 years.
Financed partly with $7M term loan from Bridgewater Bank at 7.85% interest, maturing May 2029.
Timber Tech 2023 revenue $18.8M, adjusted EBITDA $5.5M; co-owners Tom Niska and Dale Schiferl stay.
Expects improved profitability and cash flow; adds niche glulam products to Building Solutions division.

item 1.01 item 2.01 item 2.03 item 8.01 item 9.01

Key facts

Extracted from this filing and checked against the source text.

M&A Transactions SEC 8-K Item 2.01/5.01 confidence 0.9

STAR EQUITY HOLDINGS, INC. completed an acquisition involving Timber Technologies, Inc. for up to $24.1 million (closed 2024-05-17).

Action: acquisition
Counterparty: Timber Technologies, Inc.
Consideration: up to $24.1 million
Closing: 2024-05-17

Exact text from the filing

forth in the Purchase Agreement (the “Acquisition”). As consideration for the Acquisition, under the Purchase Agreement, the Seller is entitled to receive consideration of up to $24.1 million, subject to certain post-closing adjustments, including an earn-out provision and a hold back to satisfy certain indemnification obligations under the Purchase Agreement. The

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.95

STAR EQUITY HOLDINGS, INC. entered into Bridgewater Loan Agreement with Bridgewater Bank valued at Loan with interest at 7.85%, principal payable May 20, 2029 (effective 2024-05-17).

Action: entry
Agreement: credit facility
Counterparty: Bridgewater Bank
Value: Loan with interest at 7.85%, principal payable May 20, 2029
Effective: 2024-05-17

Exact text from the filing

In connection with the completion of the Acquisition, on May 17, 2024, Timber Technologies Solutions, Inc., a wholly-owned subsidiary of the Company (the "Borrower"), entered into a Loan Agreement (the "Bridgewater Loan Agreement") with Bridgewater Bank ("Bridgewater") and issued a Term Promissory Note to Bridgewater thereunder (the "Facility").

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.95

STAR EQUITY HOLDINGS, INC. entered into Asset Purchase Agreement with Timber Technologies, Inc. valued at up to $24.1 million (effective 2024-05-17).

Action: entry
Agreement: asset purchase
Counterparty: Timber Technologies, Inc.
Value: up to $24.1 million
Effective: 2024-05-17

Exact text from the filing

On May 17, 2024 (the "Closing Date"), Star Equity Holdings, Inc. (the "Company") entered into an asset purchase agreement (the "Purchase Agreement") with Timber Technologies, Inc. (the "Seller"), pursuant to which the Company acquired substantially all of the assets used in the business of the Seller and assumed certain liabilities of the Seller, as set forth in the Purchase Agreement (the "Acquisition").

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Source: SEC EDGAR

accession 0000707388-24-000039

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