BroadBeach Offers $90 Million for McGill

BroadBeach Associates Inc., a Los Angeles-based investment firm, said Monday that it has offered to acquire McGill Manufacturing Co. for $62 a share, or about $90 million.

BroadBeach, formed in September, 1988, and seeking to make its first acquisition, proposed the buyout in an Aug. 10 letter to McGill, a Valparaiso, Ind.-based producer of ball bearings and electrical equipment. McGill had no immediate response to the bid.

Under the proposal, after the purchase BroadBeach would allow McGill’s management and employees to buy part of the company through an employee stock ownership plan. BroadBeach, which owns 7% of the manufacturing firm, would retain an unspecified portion of McGill. In over-the-counter trading Monday, McGill stock rose $5.75 a share to $57.

BroadBeach would retain McGill’s management after the proposed buyout, according to Vincent Celentano, vice president of the investment firm.

“There are good growth opportunities for this company and this industry,” Celentano said. “With our talent and their management talent, we could expand . . . in the U.S. and abroad.”

In the fiscal year ended June 30, McGill’s earnings more than doubled to about $15 million from $6 million. Sales rose to about $110 million from $103 million. With nearly 1,000 workers, McGill is the biggest employer in Indiana’s Porter County, a region located about 60 miles southeast of Chicago.