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National Technical Systems To Be Acquired By Aurora Capital For $23/shr In Cash

National Technical Systems, Inc. (NTSC), a provider of engineering services, on Friday said that it has entered into an agreement to be acquired by an affiliate of private equity firm Aurora Capital Group for $23 per share in cash.

Following the deal, National Technical Systems will become a privately held company.

In pre-market activity, National Technical Systems shares gained $6.15 or 37.09 percent, and are currently trading at $22.73.

In the deal, the per share price of $23 reflects a premium of 38.7 percent over the closing price of the company's common stock on August 15.

The provider of engineering services to the aerospace, defense, telecommunications, automotive and high technology markets noted that the proposed merger is subject to the approval of its shareholders. The company will ask its shareholders to consider and vote to approve the merger agreement at a Special Meeting of Shareholders, which is expected to be held no later than October 31. The company expects the merger to close before the end of 2013.

The deal closure is not subject to a financing condition, but is subject to the accuracy of the representations and warranties, performance of the covenants and other agreements included in the merger Agreement, and customary closing conditions.

The company noted that its board of directors formed a special committee of three independent directors to consider the transaction and to negotiate the price per share and the terms of the deal. Based upon the unanimous recommendation of the special committee, the board approved the deal, noting that the terms are fair to, and in the best interests of, the public shareholders of NTS.

National Technical Systems President and CEO William McGinnis said the company will continue to operate in much the same way as it always has and that he expects the core management team and staff will remain in place.

The company's Founder and Vice Chairman of the Board Aaron Cohen said, "It will allow NTS and our employees to continue to grow and excel as the preeminent independent testing and engineering services organization in North America. With Aurora as a partner, I believe the Company's potential is limitless."

Following the transaction, the company's shares will be deregistered under the Securities and Exchange Act of 1934, as amended, and the company will no longer be subject to the reporting requirements of the Exchange Act, and the shares of its common stock will no longer trade on any market.

In the transaction, Houlihan Lokey served as financial advisor and Sheppard Mullin LLP as legal counsel for the special committee. Gibson, Dunn & Crutcher LLP served as legal counsel to Aurora Capital Group.

by RTTNews Staff Writer

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