Digirad Corp. (NSDQ:DRAD) said this week that its board of directors approved a deal to buy ATRM Holdings as a “kick-off” transaction to convert Digirad to a diversified holding company.
As part of the acquisition, Digirad plans to create Series A non-convertible, cumulative, perpetual preferred stock with a stated value of $10 apiece. ATRM shareholders are slated to receive consideration consisting of 0.03 shares of Digirad Series A preferred stock for every ATRM common share.
Also, each Series B preferred stock of ATRM will be exchanged for 2.5 shares of Digirad’s Series A preferred stock, according to Digirad.
The transaction is slated to close in the third quarter of 2019, pending approval by ATRM shareholders.
Following the acquisition of ATRM, the new team will include Jeffrey Eberwein (chairman of Digirad), Matthew Molchan (Digirad Health’s CEO), Daniel Koch (ATRM’s CEO), David Noble (COO and CFO of Digirad) and Hannah Bible (VP of Digirad’s legal division).
“Digirad believes that converting into a diversified holding company with a shared services center will create significant value for Digirad stockholders over time because the conversion is expected to improve future revenue, cash flow, and earnings growth, and create a platform for future bolt-on acquisitions and other growth opportunities,” the company said in a press release.
