FORT WORTH, Texas, Feb. 25, 2013 /PRNewswire/ -- AZZ incorporated
("AZZ") (NYSE: AZZ), a manufacturer of electrical products and a
provider of galvanizing services, today announced that it has
entered into a Securities Purchase Agreement to acquire Aquilex
Specialty Repair and Overhaul, LLC ("Aquilex SRO"), a global leader
in maintenance, repair and revitalization services to the nuclear
and fossil fuel power generation markets, as well as the refining
and industrial markets from Aquilex Holdings LLC, which is majority
owned by affiliates of Centerbridge Partners, L.P. The acquisition,
which is subject to customary closing conditions, including the
expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act, is anticipated to close within
approximately 30 days. The acquisition is a part of the
stated AZZ strategy to expand our offerings in the Electrical and
Industrial Products Segment and to enhance our market presence in
our primary served markets. Aquilex SRO's proprietary processes and
highly-engineered technology solutions provide unique life
extension options for critical plant infrastructure utilizing
proprietary automated equipment and a specialized work force.
Founded in 1978 to provide machine welding services for nuclear
units and nuclear plant maintenance, Aquilex SRO has continued
to expand its service offerings to offer a balanced portfolio of
life extension services to the nuclear, fossil, waste to energy,
refining, chemical processing, pulp and paper and general
industrial markets. Headquartered in Norcross, GA, Aquilex SRO also operates from
facilities located in St. Petersburg,
FL, Edmonton Alberta,
Canada, Radom Poland, Hellevoetsluis, Netherlands and Sao
Paulo, Brazil. Aquilex SRO is marketed under the trade
names of Aquilex SRO, WSI and SMS. Aquilex HydroChem LLC is
not part of this transaction.
"Aquilex SRO is a great addition to AZZ's outstanding portfolio
of brands and will be part of the Electrical and Industrial
Products Segment. As with our recent acquisition of Nuclear
Logistics Incorporated, it provides us with a recurring revenue
stream during the full life cycle of a nuclear power generation
plant, a fossil fuel plant, a waste-to-energy plant, a refinery or
other industrial complex. Approximately one third of its revenues
are derived from nuclear power, one third from the fossil fuel and
waste-to-energy, and one third from refining, petrochemical, and
general industrial. Aquilex SRO's proprietary processes and unique
skills truly make them an outstanding provider of highly
engineered, customized proven solutions," stated David H. Dingus, president and chief executive
officer of AZZ incorporated.
For the first full year under AZZ, Aquilex revenues are expected
to be in the range of $225 to $250
million. AZZ expects the acquisition to be accretive for the
first twelve months of ownership of approximately $0.25 to $0.30 per fully diluted share, after
accounting for approximately $5
million deal transaction cost that will be written off in
the first year of operation. In the second full year of
ownership, AZZ anticipates that the accretion will approximate
$0.50 to $0.60 per diluted
share. It is anticipated that we will update FY 2014 as part
of our FY 2013 final earnings announcement and conference call on
April 5, 2013. A detailed
discussion of the business will also be included in this conference
call. The existing senior management team of Aquilex SRO has
agreed to join the AZZ leadership team.
The Securities Purchase Agreement provides for the acquisition
by AZZ of all of the equity interests of Aquilex SRO for cash
consideration in the amount of $250
million. The $250
million will be adjusted for changes in working capital at
the time of closing. Funding for the acquisition is to be
provided from cash on hand and by a new bank credit agreement,
which is anticipated to be entered into by AZZ simultaneously with
the closing of the Aquilex SRO acquisition. The framework of
this new credit agreement is currently in place.
Stifel is acting as exclusive financial advisor, and Kelly, Hart
and Hallman is acting as legal counsel, to AZZ incorporated in
connection with the transaction. Houlihan
Lokey is acting as exclusive financial advisor, and Kirkland
& Ellis LLP is acting as legal counsel, to Aquilex Specialty
Repair and Overhaul LLC.
About AZZ incorporated (NYSE: AZZ)
AZZ incorporated is a specialty electrical equipment
manufacturer serving the global markets of industrial, power
generation, transmission and distributions, as well as a leading
provider of hot dip galvanizing services to the North American
steel fabrication market.
About Aquilex Specialty Repair and Overhaul LLC
Aquilex Specialty Repair and Overhaul LLC, headquartered in
Norcross, GA, is a leading global
provider of critical recurring and commonly nondiscretionary
maintenance, repair and overhaul services to a diverse base of
blue-chip customers in the nuclear, fossil power, refining,
chemical processing, pulp and waste‐to‐energy industries. Aquilex
SRO's proprietary processes and highly-engineered technology
solutions provide unique life extension options for critical plant
infrastructure and utilize proprietary automated equipment and a
specialized workforce. Aquilex SRO is a wholly-owned subsidiary of
Aquilex Holdings LLC, which is majority owned by affiliates of
Centerbridge Partners, L.P.
About Centerbridge Partners, L.P.
Centerbridge Partners, L.P., headquartered in New York, NY is a private investment firm with
approximately $20 billion in capital
under management as of December 2012. The firm focuses on
private equity and credit investments. The firm is dedicated
to partnering with world-class management teams across targeted
industry sectors to help companies achieve their operating and
financial objectives.
Safe Harbor Statement
Certain statements herein about our expectations of
future events or results constitute forward-looking statements for
purposes of the safe harbor provisions of The Private Securities
Litigation Reform Act of 1995. You can identify forward-looking
statements by terminology such as, "may," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue," or the negative of these terms or other
comparable terminology. Such forward-looking statements are based
on currently available competitive, financial and economic data and
management's views and assumptions regarding future events. Such
forward-looking statements are inherently uncertain, and investors
must recognize that actual results may differ from those expressed
or implied in the forward-looking statements. This release may
contain forward-looking statements that involve risks and
uncertainties including, but not limited to, changes in customer
demand and response to products and services offered by AZZ,
including demand by the electrical power generation markets,
electrical transmission and distribution markets, the industrial
markets, and the hot dip galvanizing markets; prices and raw
material cost, including zinc and natural gas which are used in the
hot dip galvanizing process; changes in the economic conditions of
the various markets that AZZ serves, foreign and domestic, customer
request delays of shipments, acquisition opportunities, currency
exchange rates, adequacy of financing, and availability of
experienced management employees to implement AZZ's growth
strategy. AZZ has provided additional information regarding risks
associated with the business in AZZ's Annual Report on Form 10-K
for the fiscal year ended February 28,
2012 and other filings with the SEC, available for viewing
on AZZ's website at www.azz.com and on the SEC's website at
www.sec.gov. You are urged to consider these factors
carefully in evaluating the forward-looking statements herein and
are cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by this
cautionary statement. These statements are based on information as
of the date hereof and AZZ assumes no obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Contact:
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Dana
Perry, Senior Vice President – Finance and CFO
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AZZ
incorporated 817-810-0095
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Internet: www.azz.com
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Lytham
Partners 602-889-9700
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Joe
Dorame or Robert Blum
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Internet:
www.lythampartners.com
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SOURCE AZZ incorporated