The buyout firm agreed to take The Marygold Companies private at $2.00 a share, double Thursday's close. Holders of about 75% of the stock have already agreed to vote for it.
Madison Dearborn Partners wants the fund manager behind the United States Oil Fund. It is buying the whole company to get it.
The Chicago buyout firm agreed to acquire The Marygold Companies, parent of USCF Investments, for $2.00 a share in cash, a 100% premium to Thursday's close of $0.9999. USCF manages about $6 billion in commodity exchange-traded funds, with USO as its flagship. The deal values Marygold's equity at about $85 million.
The arithmetic
At that price, Madison Dearborn is paying roughly 1.4% of the assets USCF manages. Marygold also owns smaller businesses in other industries, and it agreed separately this week to sell the assets of a New Zealand printing subsidiary for about $1.4 million, a transaction too small to affect the valuation.
Madison Dearborn has said it intends to refocus the company on USCF. Tim Rotolo, who built a uranium miners ETF and sold it to Sprott, will become chief executive.
The certainty
Holders of about 75% of Marygold's shares, including outgoing chief executive Nicholas Gerber, have signed voting and support agreements. The board approved the deal unanimously. Closing is expected in the first half of 2027 or earlier, subject to stockholder, regulatory and change-of-control approvals.
Marygold shares traded near $1.94 on Friday afternoon, up about 94%, on heavy volume. That leaves a spread of about 3% to the offer price. With three-quarters of the stock committed, the spread is mostly the cost of waiting until 2027 rather than a bet on whether the deal happens.
The ETF shelf
Commodity ETF sponsors are hard to build from scratch because investors concentrate in a few established products. Buying an existing shelf with a recognized flagship gives Madison Dearborn distribution and scale immediately. The risk sits in the asset base, which rises and falls with investor demand for oil and other commodities, and in the change-of-control approvals the deal requires.
The merger agreement, once filed, will show whether it carries a termination fee or a go-shop period. USCF's assets under management between now and closing will show whether the price holds up as a multiple of what Madison Dearborn is actually buying.