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CompuDyne Corp. (NASDAQ: CDCY) has an number of business lines, including electronic security products for prisons and jails, video badging services for the US Air Force, and even bullet and blast resistant windows.

In light of the need for security, it seems like CompuDyne is in a growth sector, right? Not for shareholders. Over the years, the stock price has been fairly choppy.

Well, the company has now decided to go private in a deal worth about $59 million, which is a 32% premium from Monday's closing stock price. The private equity investor is the Gores Group.

Interestingly enough, CompuDyne mentioned Sarbanes-Oxley as a key reason for the transaction. After all, the compliance costs have been about $4-$5 million per year.

CompuDyne also reported its quarterly results. And, unfortunately, there was a 7% drop in revenues and earnings fell 33% to $204,000.

In other words, the fundamentals are not getting better. So, perhaps the private equity folks can make some big changes to get things back on track.

If you want to check out other recent M&A deals, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

CompuDyne: Secure in going private originally appeared on BloggingStocks on Wed, 08 Aug 2007 13:30:00 EST. Please see our terms for use of feeds.

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