Anixter International Inc. Announces Closing of Power Solutions Acquisition
October 05 2015 - 7:30AM
Business Wire
Anixter International Inc. (NYSE: AXE) today announced that it
has completed the acquisition of the Power Solutions segment of HD
Supply for $825 million, subject to customary post-closing working
capital and other customary adjustments. Power Solutions reported
fiscal 2014 revenue of $1.9 billion and adjusted EBITDA of $79
million.
The acquisition, which is the largest in Anixter’s history, is
expected to be accretive to earnings by $0.55 - $0.65 in the first
full year of operation, exclusive of transaction and one-time
integration expenses. Anixter funded the acquisition through a
combination of the previously announced $350 million notes offering
issued in August 2015 (with interest accruing since August 18),
borrowings under revolving credit facilities, a Canadian term loan
and proceeds from the recent sale of the OEM Supply – Fasteners
business. A more detailed discussion of the financial impact will
occur on Anixter’s upcoming third quarter 2015 earnings call on
Tuesday, October 27, 2015.
“Power Solutions is a compelling strategic acquisition for
Anixter, significantly enhancing our competitive position in the
electrical wire and cable business and further strengthening our
customer and supplier value proposition. In addition to
transforming our existing utility business into a leading North
American distributor to the utility sector, this acquisition will
enable us to provide a full line electrical solution to our
existing customers and will provide us with broader access to the
mid-size electrical construction market,” said Bob Eck, President
and Chief Executive Officer of Anixter. “Like Anixter, Power
Solutions has built their business on providing complex supply
chain services and value added distribution to their customers. We
look forward to combining the talented Power Solutions team within
the Anixter family. Together we will provide broader solutions to
our respective customers and substantial long-term growth and value
creation for all Anixter stakeholders.”
John Tisera, President of Power Solutions, stated, “We are
excited to have access to Anixter’s broad portfolio of products,
services and technical expertise which will allow us to further
expand our customer offerings. The strategic rationale of this
combination is strengthened by our shared culture of partnering
with both our customers and world-class suppliers to bring value to
their businesses.”
“This acquisition combined with the September 2014 acquisition
of Tri-Ed and the June 2015 sale of our OEM – Supply Fasteners
segment completes a transformation of our global platform at this
time and results in a portfolio that is well-positioned for
substantial and sustainable long term growth,” said Ted Dosch,
Executive Vice President and Chief Financial Officer. “With our
attention now focused on the successful integration of these
businesses and maximizing their synergistic value, we expect to
generate significant free cash flow to support our balanced capital
allocation strategy, including a return to our long term target of
45-50 percent debt-to-total capital ratio within the short to
medium term.”
Greenhill & Co., LLC served as financial advisor, Skadden,
Arps, Meagher & Flom LLP served as legal counsel, and KPMG LLP
served as accounting advisor to Anixter on the transaction.
About Anixter
Anixter International is a leading global distributor of
enterprise cabling & security solutions and electrical and
electronic wire & cable. The company adds value to the
distribution process by providing its customers access to 1)
innovative inventory management programs 2) approximately 600,000
products and $1.2 billion in inventory 3) approximately 340
warehouses/branch locations with 5.5 million square feet of space
and 4) locations in over 300 cities in more than 50 countries.
Founded in 1957 and headquartered near Chicago, Anixter trades on
the New York Stock Exchange under the symbol AXE.
Safe Harbor Statement
Statements in this press release regarding the proposed
transaction and any other statements about our managements’ future
expectations, beliefs, goals, plans or prospects constitute forward
looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Any statements that are not
statements of historical fact should also be considered to be
forward looking statements. There are a number of important factors
that could cause actual events to differ materially from those
indicated by such forward looking statements, including: potential
adverse reactions or changes to business or employee relationships;
the successful integration of the acquired businesses; any changes
in general economic and/or industry specific conditions; and the
other factors described in our Annual Report on Form 10-K for the
year ended January 2, 2015 and our most recent Quarterly Reports on
Form 10-Q each filed with the Securities and Exchange Commission.
We expressly disclaim any intention or obligation to update any
forward looking statements as a result of developments occurring
after the date of this press release.
Non-GAAP Financial Measures
This release includes certain financial measures computed using
non-GAAP components as defined by the SEC. Non-GAAP financial
measures provide insight into selected financial information and
should be evaluated in the context in which they are presented.
These non-GAAP financial measures have limitations as analytical
tools, and should not be considered in isolation from, or as a
substitute for, financial information presented in compliance with
GAAP. Non-GAAP financial measures may not be comparable to
similarly titled amounts reported by other companies. Management
does not use these non-GAAP financial measures for any purpose
other than the reasons stated above.
EBITDA is defined as net income from continuing operations
before interest, income taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA before foreign exchange and
other non-operating expense and non-cash stock-based compensation,
excluding the other special items from reported financial results,
as defined above. Adjusted EBITDA is presented because we believe
it is a useful indicator of our performance and our ability to meet
debt service requirements. It is not, however, intended as an
alternative measure of operating results or cash flow from
operations as determined in accordance with generally accepted
accounting principles.
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Anixter ContactsFor
Investors:Ted DoschEVP - Finance and CFO224.521.4281orLisa
Micou Meers, CFAVice President – Investor
Relations224.521.8895orFor Media:Dawn MarksVice President –
Communications224.521.8484
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