SecurityWorldMarket

15/01/2020

Bidding war for Anixter reaches $4.5B

Glenview, Il (USA)

Anixter International Inc, a leading global distributor of network & security solutions, electrical & electronic solutions and utility power solutions, is beginning January 2020 at the centre of a bidding war between two rival companies interested in acquiring the company's stock.

On 30th October 2019, Anixter International Inc, released a statement announcing that the company was entering into a definitive agreement with an affiliate of Clayton, Dubilier & Rice (“CD&R”) to be acquired in an all cash transaction valued at approximately $3.8 billion.

According to the statement, the transaction was to result in Anixter becoming a private company and was expected to close by the end of the first quarter of 2020.  However, a proviso within the agreement gave the company a time framed opportunity to invite other superior bids.

Later events have since superseded this agreement after Anixter announced its latest financials indicating strong organic growth.  On releasing the company's third quarter 2019 results, Anixter's Bill Galvin, President and Chief Executive Officer commented: "Anixter delivered another strong quarter, with organic sales growth of 2.6% for the quarter, and growth in the NSS and UPS Segments. This organic growth was within our outlook range, and was achieved against a strong 2018 third quarter. Our two year cumulative growth was 10%. This brings our year-to-date organic sales growth to 5.4%. Consistent with our stated strategy, our revenue and gross margin growth funded our continued investment in innovation while driving enterprise value," commented Bill Galvin, President and Chief Executive Officer.

Specifically, the Network & Security Solutions division reported record third quarter sales of $1.2 billion, an increase of 3.6%, or 4.3% on an organic basis. NSS security sales of $524.5 million, which represents approximately 45% of segment sales, increased 8.2%. Adjusted EBITDA increased 12.8% to $92.0 million. Adjusted EBITDA margin of 7.8% compares to 7.2%.  The Utility Power Solutions division also showed an increase, whilst the Electrical & Electronic solutions division showed a small decrease.

Subsequently, a bidding war developed including superior bids from both CDR the original bidders, and rival bidders Wesco. The latest information from Anixter, following a further new bid from Wesco, reflects an enterprise value of approximately $4.5 billion including net debt. 

The board is now determining the revised offer and CDR has the option of five days to negotiate an amendment.


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