Form 4: Steel Connect Inc. Completes Merger, Executive Chairman Lichtenstein Discloses Share Transactions

Warren G. Lichtenstein, Executive Chairman and Interim CEO of Steel Connect, Inc., reports share transactions following the company's merger with Steel Excel Sub I, LLC.

Summary

• Warren G. Lichtenstein and Steel Partners, Ltd. jointly filed a Form 4 detailing changes in beneficial ownership of Steel Connect, Inc. shares.
• The filing is related to the merger of Steel Excel Sub I, LLC into Steel Connect, Inc., making Steel Connect a wholly-owned subsidiary of Steel Partners Holdings L.P.
• Prior to the merger, Mr. Lichtenstein sold 182,526 shares to Steel Excel Inc. for $2,089,922.70, at $11.45 per share.
• Following the merger, each share of Steel Connect was converted into the right to receive $11.45 in cash and one Reith CVR (Contingent Value Right).
• Restricted shares became fully vested upon the merger, with holders receiving the per share merger consideration.
• Officers and directors waived their rights to any proceeds from the Reith CVR litigation.

Sentiment

Score: 7

Explanation: The document is a standard regulatory filing detailing a merger and associated share transactions. The sentiment is neutral to slightly positive as the merger has been completed as expected.

Future Outlook

The merger has been completed, and Steel Connect is now a wholly-owned subsidiary of Steel Partners Holdings L.P. The future value of the Reith CVR is contingent on the outcome of litigation.

Management Comments

• The Reporting Persons disclaim beneficial ownership of the Shares owned directly by the other members of the Section 13(d) group except to the extent of his or its pecuniary interest therein.
• The officers and directors of the Issuer have waived any right to receive any portion of the Reith Net Litigation Proceeds with respect to any Reith CVR received in the Merger.

Industry Context

This merger represents a consolidation within the corporate structure of Steel Partners, with Steel Connect becoming a wholly-owned subsidiary. This type of transaction is common in corporate restructuring and M&A activity.

Comparison to Industry Standards

• Mergers and acquisitions are a common strategy for companies to consolidate operations, achieve synergies, or restructure their business.
• The cash consideration of $11.45 per share is a specific valuation for the company's shares at the time of the merger.
• The inclusion of a Contingent Value Right (CVR) is a mechanism often used in mergers to provide additional value to shareholders based on future events, in this case, the outcome of litigation.

Related Party Transactions

• Warren G. Lichtenstein sold 182,526 shares to Steel Excel Inc. prior to the merger.

Stakeholder Impact

• Shareholders received $11.45 per share in cash and one Reith CVR.
• Restricted stock holders received the merger consideration upon vesting.
• Officers and directors waived their rights to Reith CVR litigation proceeds.

Key Dates

Keywords

Merger, Steel Connect, Steel Partners, Form 4, Beneficial Ownership, Share Transaction, CVR, Warren G. Lichtenstein