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Sylvan Inc., the Armstrong County mushroom and spawn producer, has agreed to be acquired by Snyder Associated Cos., a private holding company in Kittanning, Armstrong County, for $63 million.
The offer, valued at $12.25 per share, lifted Sylvan shares nearly 20 percent, with the stock closing at $12.06, up $1.96 from Friday's close.
Snyder, which also has interests in mushrooms as well as minerals, oil, gas, sand and gravel, is one of the investors in a group that tried to buy Sylvan earlier this year. That group, which also included some Sylvan executives, withdrew its $11-per-share bid to purchase the company in June. But some Sylvan managers, including Chairman Dennis C. Zensen, who owns about 14 percent of Sylvan, are expected to hold an equity stake once the new agreement is finalized.
Neither company would comment on the deal, which also calls for Snyder to assume about $32 million in debt from Sylvan.
Sylvan said it would schedule a meeting in the first quarter of 2004 for shareholders to vote on the transaction.
Saxonburg-based Sylvan, which employs 850 worldwide, has been considering a sale of the company since last year when it hired a Boston investment banking firm to help it explore options to increase shareholder value. Among the parties that expressed interest in buying it, besides the management group, was a family-run mushroom business in Italy.
Sylvan's net income fell 19 percent last year, to $5 million, on sales of $88.2 million.
The company said last week that third-quarter net income fell 24 percent to $839,000, or 16 cents a share, from $1.1 million, or 20 cents a share, a year ago. Third-quarter sales rose slightly to $23.8 million from $22.3 million a year ago.
In the third-quarter report, Zensen said that while the company's fresh mushroom business met expectations, sales volume for the spawn segment was down because of mushroom farm closures and a competitive market. Sylvan is considered the largest producer worldwide of spawn, a product equivalent to seed for mushroom, and spawn accounts for about 70 percent of Sylvan's total sales.
Besides its Armstrong County operations, Sylvan has operations in Florida, Nevada, Iowa, Canada, Australia, France, Ireland, England, The Netherlands, Hungary and South Africa.
Family-operated Snyder was formed in 1941 when brothers Elmer and Charles Snyder formed a small construction business. They eventually diversified into coal mining, sand and gravel, highway equipment and other businesses, including a Quality Inn motel in Kittanning, before creating a management holding company in 1976.
Now operated by the founders' sons and grandsons, Snyder employs about 1,000 at its various businesses and is a partner in Creekside Mushrooms Ltd., which produces the Moonlight Mushrooms brand.