Sheridan Square Entertainment and Hirsch International Corp. have signed a definitive agreement to merge, which will result in the music company shareholders owning 62% of the outstanding shares of Hi

Sheridan Square Entertainment and Hirsch International Corp. have signed a definitive agreement to merge, which will result in the music company shareholders owning 62% of the outstanding shares of Hirsch.

The deal, which is expected to close in late October if it gets the necessary regulatory approvals, will create a company with annual revenues of about $88 million. But while it gives Sheridan Square a vehicle to become a publicly-traded company through the backdoor, it is not expected to result in much synergy. Hirsch is a wholesaler of industrial embroidery machinery. Hirsch currently carries about $11.5 million in cash on its balance sheet.

Sheridan Square, which owns Musicrama, Artemis, and Compendia, is expected to have about $45 million in revenues this year, according to sources within that company.

After the deal is completed, key executives at the merged company will be Sheridan Square’s co-CEO Joe Bianco, who will serve as CEO; Hirsch’s president and CEO Paul Gallagher, as president and CEO; Hirsch’s executive VP and CFO Beverly Eichel will remain in that position. Henry Arnberg, Hirsch’s founder, will be chairman of the new company while Sheridan’s Square’s co-CEO Anil Narang, will be vice chairman.

The board of directors will consists of Sheridan Square chairman Rob Michalik, who’s firm Kinderhook Capital Fund is one of the equity investors in Sheridan Square; Joe Pretlow, formerly a partner in Bain Capital who is also an equity holder in Sheridan Square; Arnberg, Bianco, and Gallagher; and five independent directors to be named.

At midday, Hirsch shares, which trade through the NASDAQ SmallCap board under the symbol HRSH, were up a few pennies to $1.18, giving the company a market capitalization of about $10 million. Its 52-week range is 81 cents-$1.63.