Wayzata-based Nortech Systems is expected to report its second quarter earnings results on Wednesday. A group of investors is eager to hear from the company not only the results for the quarter-ended June 30 but also more about the company's latest acquisition.
On June 17 Nortech announced that it had an agreement to acquire Eden Prairie-based Devicix LLC for between $5.3 million and $7.8 million.
Devicix is a medical products design and engineering firm with about 30 employees. In the press release announcing the agreement Nortech said the deal would be a "win-win for both companies and our customers."
Nortech Systems is a full-service electronics manufacturing services provider and operates in a number of industries including the industrial equipment, aerospace/defense and medical industries. Nortech said the addition of Devicix would accelerate its growth in the medical industry - one of its strongest markets.
One week later an investor group organized as Mutiney Fund I, and its three members, investors from Indiana, Ohio and Wisconsin, filed a 13D with the Securities and Exchange Commission saying they had accumulated 138,000 shares, or a little more than 5 percent of Nortech's shares outstanding.
In a letter to Nortech management and its board of directors included in the filing the concerned shareholder group expressed its displeasure with the company's financial results and the general lack of information regarding the Devicix acquisition.
Nortech's current market capitalization is $12.1 million. A $7.8 million Devicix acquisition would represent about 64 percent of Nortech's overall market cap. Based on those figures the investor group said it was expecting more disclosure on the what the company was getting and what it would contribute.
"As shareholders they really didn't tell us much of anything," said Kyle Packer, managing member of the investor group.
