GLENVIEW, Ill. -- Anixter International Inc. a leading global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts, today announced that it has entered into a definitive agreement to sell its Aerospace Hardware Division to entities controlled by Greenbriar Equity Group LLC.
Under the terms of the agreement Anixter will receive $155 million in cash, subject to a net working capital adjustment, and up to an additional $30 million if certain milestones are achieved on or before December 31, 2013. The transaction is expected to be completed during the third quarter subject to regulatory approval and customary closing conditions.
Commenting on the transaction, Robert Eck, President and CEO of Anixter, stated, "We believe this transaction is a positive development for all parties involved, as it captures what we view as a fair value for the Aerospace Hardware Division and enables us to focus our attention and resources on our core operations and strategic initiatives. Our performance in Aerospace Hardware has been strong since first entering the business through our 2002 Pentacon acquisition, having achieved first half 2011 revenues of approximately $94.1 million and EBITDA of $12.0 million. However, customer and supplier consolidation has resulted in a business model that is distinctly different than our overall model. Despite the fact that Aerospace has historically delivered operating margins in excess of our corporate average, current high working capital requirements have impacted its return on tangible capital compared to our other businesses; therefore this division is no longer strategically aligned with our overall business." Eck continued, "Given Greenbriar's significant focus in the aerospace sector, we are confident it will be a strong and supportive partner for the aerospace business and build upon its solid market position under new ownership."
Noah Roy, Managing Director of Greenbriar, stated, "We believe that this transaction will enable the employees of the Aerospace Hardware Division to continue to provide outstanding service and supply chain value to their customers, the majority of which are the world's leading aerospace manufacturers. We look forward to partnering with the current management team to grow the business and invest in the future success of this Division."
In the third quarter of 2011, Anixter will report the results of this business as "Discontinued Operations" and all prior periods will be restated to reflect this classification.
