Notable Mergers and Acquisitions of the Day 10/07: (SOA)/(SWTX) (FFG) (SWHC)

• Solutia Inc. (NYSE: SOA), a market-leading performance materials and specialty chemicals company, and Southwall Technologies Inc. (Nasdaq: SWTX), a leading innovator of energy-saving films and glass products for automotive and architectural markets, today announced that they have signed a definitive agreement providing for Solutia to acquire Southwall for $13.60 per share of Southwall common stock in cash. The transaction, which has been approved by the boards of directors of both companies, has an aggregate equity purchase price of approximately $113 million. The acquisition will be funded by Solutia from existing cash on hand.
  
  Under the terms of the agreement, it is anticipated that a subsidiary of Solutia will commence a tender offer for all of the outstanding shares of Southwall common stock no later than October 25, 2011. Southwall stockholders will receive $13.60 per share in cash for all outstanding shares of Southwall common stock tendered in the offer and accepted for payment by Solutia, representing a 45% premium to the closing price per share of Southwall common stock on October 6, 2011. The closing of the tender offer is subject to customary terms and conditions, including the tender of a majority of the outstanding shares of Southwall and the receipt of regulatory approvals. Following the successful completion of the tender offer and following the receipt of stockholder approval, if necessary, the agreement provides for Southwall to merge with a subsidiary of Solutia and become a wholly-owned subsidiary of Solutia, with all shares of Southwall common stock then outstanding being converted into the right to receive the offer price in cash.
  
  The tender offer is expected to be completed in the fourth quarter of 2011. Certain funds affiliated with Needham Funds, together with Dolphin Direct Equity Partners, L.P., which collectively hold shares of Southwall common stock and convertible preferred stock equal to approximately 63% of the outstanding shares of Southwall common stock on an as-converted basis, have entered into tender and support agreements with Solutia pursuant to which they have agreed to support the transaction and tender their shares in the offer.
  
  Moelis & Company LLC and Kirkland & Ellis LLP acted as advisors to Solutia on this transaction. Needham & Company, LLC, Seven Hills Group LLC and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP acted as advisors to Southwall on this transaction.
  
  
• FBL Financial Group, Inc. (NYSE: FFG) today announced it has agreed to sell its subsidiary, EquiTrust Life Insurance Company, to controlled affiliates of Guggenheim Partners, LLC for a preliminary purchase price of $440 million in an all-cash transaction.
  
  Guggenheim Partners, LLC is a diversified financial services firm with more than $125 billion in assets under management. In addition, FBL Financial Group is announcing several capital management actions including redemption of $175 million of public senior notes, redemption of $50 million of affiliate senior notes and a stock repurchase authorization of $200 million.
  
  This transaction is subject to regulatory approval and other customary closing conditions, and the purchase price will be subject to closing and post-closing net worth adjustments. The transaction is currently expected to close on or about December 30, 2011. Bank of America Merrill Lynch is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to FBL Financial Group.
  
  
• After the market closed Thursday, Smith & Wesson Holding Corporation (Nasdaq: SWHC) said it will divest its perimeter security business in order to focus on its core firearm business. The Company is currently exploring strategic alternatives to accomplish the divestiture.
  
  Smith & Wesson's core firearm business accounted for 92.5% of its revenue in the first quarter of its 2012 fiscal year. The Company possesses one of the most well-regarded and valuable brands in the global firearm industry. Smith & Wesson's firearm customers include retail consumers in the U.S. market, as well as professionals from law enforcement, government, international, and military markets. As the market share leader in handguns and modern sporting rifles in the United States, the Company maintains a broad product portfolio and a robust new product pipeline. In its most recent quarter, Smith & Wesson reported year-over-year firearm revenue growth of 18.0% and firearm unit growth of over 44.4%.

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