Oakdale-based housing materials maker ATRM Holdings has been acquired by Digirad Corp..
The transaction marks a cross-industry merger: Suwanee, Georgia-based Digirad operates in the health tech space, as a manufacturer of medical imaging products. Through its subsidiaries, ATRM manufactures modular housing units and building supplies for commercial and residential markets.
The merger will turn Digirad into a holding company, as noted in a press release. As part of the deal, Digirad will convert currently owned common stock shares of ATRM Holdings into Series A preferred stock at a value of 30 cents a share, and will convert currently owned Series B ATRM shares into Series A Digirad shares, at a ratio of 1:2.5.
ATRM will operate as a subsidiary of parent company Digirad, and Digirad will take on a holding company structure with a shared services center. Digirad expects the move to generate more value for company stockholders.
“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.
Also as part of the merger, ATRM CEO Daniel Koch will join the Digirad leadership team, which includes chairman Jeffrey Eberwein, CEO Matthew Molchan, vice president of legal Hannah Bible, and COO David Noble.
Noble was recently appointed CFO after serving in the position on an interim basis since January.
Financial terms of the deal were not disclosed. The merger agreement was filed with the Securities and Exchange Commission July 3. The transaction is expected to close in 2019’s third quarter.