Mocon, a Brooklyn Park-based maker of lab-and-field gas analysis instruments for the packaged food industry, is being sold for $182 million.
Electronic instrumentation company Ametek is paying $30 a share in the deal announced Monday, nearly a 40 percent premium over Mocon's closing price Thursday.
"Mocon is an excellent company that has tremendous synergy with Ametek," Ametek CEO David Zapico said in a statement. "They are the global leader in gas analysis instrumentation for package and permeation testing. Its products and technologies nicely complement our existing gas analysis instrumentation business and provides us with opportunities to expand into the growing food and pharmaceutical package testing market."
Mocon, founded in 1963 and a public company for nearly 30 years, had no comment beyond a public statement by Chief Executive Robert Demorest.
"We believe this transaction creates significant value for our shareholders and provides long-term benefits for our customers and employees," Demorest said. "By joining a larger global enterprise, Mocon will have the resources to expand our market leading gas analysis products and technologies."
Mocon's net income grew 68 percent to $5 million, or 86 cents per share, in 2016, on revenue that increased 4 percent, to $63.3 million.
Ametek reported net income of $512.2 million on revenue of $3.84 billion.
Ametek is paying a 39 percent premium over Mocon's April 13 close. Mocon's stock rose 37 percent to $29.70 per share Monday on the news. Ametek shares rose 1.5 percent, to $53.97.
Elizabeth Lilly, a veteran Twin Cities portfolio manager, acquired about 400,000 Mocon shares for New York-based Gabelli Asset Management Co. several years ago.
Lilly said Mocon management has done a good job in recent years of improving performance and operating margins.
"Mocon's goal over the next several years was $100 million in revenue with 15 percent operating margins, or a $15 million operating profit," she said in an e-mail message. "I thought Mocon was worth 10 times [operating earnings], or about $29 per share."
She noted Mocon's products for the consumer packaged-goods industry include an instrument used to flush packages with inert gas that extends the shelf life of food without using preservatives.
"The inert gas is why the potato chips, pretzels, etc., are only half-filled when you pick up the bag," she said. "[Mocon has] major relationships with General Mills, Mondelez [and other food companies]. My guess is that they have close to 80 percent share in various categories."
Mocon is only the latest small-capitalization company to be acquired in an environment of disappearing small-cap companies.
The number of Minnesota publicly held companies has declined in recent years as larger companies and private-equity consolidators buy growth, often using cheap debt to finance deals, through acquisitions.
Small companies also have complained about the cost of complying with public-company regulations.
Neal St. Anthony • 612-673-7144
