Private investment firm Clayton, Dublin & Rice (CD&R) announced it agreed to acquire Anixter, a security and communications product provider for approximately $3.8 billion ($81 per share in cash). The transaction will turn Anixter into private company. The deal is expected to close by the end of the first quarter of 2020.
“We believe this transaction is in the best interest of Anixter and our stockholders,” Anixter President and CEO Bill Galvin said in a statement. “After careful and thorough analysis, together with our independent advisors, our Board of Directors unanimously approved this transaction with CD&R, which has a strong reputation and a track record of success in helping industrial distributors, like Anixter, prosper and grow.
“We are also pleased that this transaction appropriately recognizes the value of Anixter’s customer relationships, technology and solutions, financial management and global market position. It’s a great outcome for Anixter’s employees, customers and partners. As a private company, we believe Anixter will have greater flexibility to focus on and accelerate our long-term strategic priorities.”
Galvin along with other Anixter executive management team members are expected to continue to lead the company when the deal is completed. The company’s Board of Directors unanimously approved the agreement with CD&R and recommended Anixter shareholders approved the proposed deal and merger agreement.
“Anixter is an exceptionally well-positioned industrial distributor with leading market positions and differentiated capabilities that deliver strong customer value,” CD&R Partner Nate Sleeper said in a release. “We look forward to partnering with the outstanding management team, led by Bill Galvin, on initiatives to grow the business and further strengthen its competitive position while maintaining Anixter’s distinctive culture grounded in operational excellence, innovation, and an unwavering commitment to the company’s employees, customers, and global partners.”
The deal is subject to Anixter’s stockholders and regulatory approvals as well as other customary closing conditions. The transaction has fully committed financing and isn’t subject to any conditions regarding financing. CD&R Fund X, L.P., an approximately $10 billion pool of equity capital, will provide equity financing. Meanwhile, Bank of America, J.P. Morgan, Deutsche Bank Securities Inc. and Credit Suisse have provided committed debt financing.
Merger agreement terms allow Anixter to solicit proposals from third parties for a 40-calendar day period through December 9, 2019. Anixter’s board is expected to solicit superior proposals during this period, but the company has said there are no assurances that the solicitation process will result in a different transaction.