Defense Firm in Valley to Buy N.Y. Company

TransTechnology Corp., a Sherman Oaks-based aerospace and defense company, announced Monday that it has reached a $37-million agreement to buy Lundy Electronics & Systems.

TransTechnology has been trying to acquire the Glen Head, N.Y., company’s defense products division for more than four years.

The agreement calls on Trans-Technology to buy the 2.55 million Lundy shares that it does not already own for $14.50 a share. A month ago, Lundy rejected Trans-Technology’s unsolicited bid of $14 a share for 1.3 million shares.

Despite the improved offer, some Lundy shareholders reacted angrily.

“The shareholders are being ripped off,” protested Nickolas Edwards, a Long Beach businessman whose 8% stake in Lundy makes him the second-biggest shareholder after TransTechnology, which already owns a 25% interest.

Halt in Trading

TransTechnology’s chairman, Arch C. Scurlock, said a tentative acquisition agreement was reached early Friday, prompting a halt in the trading of Lundy shares on the American Stock Exchange. He said the definitive agreement was completed Friday night.

After resuming trading Monday, Lundy closed at $14.25, up 12.5 cents. TransTechnology closed at $16.875 on the Amex, up 25 cents.

Under the agreement, Trans-Technology and Lundy dropped lawsuits against one another, and Lundy’s board, which has already approved the deal, recommended it to shareholders. There are about 3 million Lundy shares in all, plus an estimated 300,000 that would be created from the anticipated conversion of options and other rights, Scurlock said.

The $14.50-per-share offer is scheduled to expire at midnight EST on March 24, and it is contingent on at least 1.6 million Lundy shares being tendered.

If the deal goes through, the 51-year-old Lundy will become a wholly owned subsidiary of Trans-Technology. Lundy’s chairman, David Seltzer, and its president, Edward J. Mulvey, both have “golden parachutes” giving them severance pay if they lose their jobs through a TransTechnology takeover.

A Lundy spokesman said that about a quarter of Lundy’s sales comes from its Pompano Beach, Fla., defense products division, which makes aluminum-coated fibers that warplanes use to confuse radar.

For the six months ended Dec. 31, Lundy’s earnings rose 54% to $978,000 while sales rose 23% to $28 million.

For the nine months ended Dec. 31, TransTechnology’s earnings dropped 23% to $3.3 million while sales fell 6% to $68.9 million.