CD&R says it will acquire company for $3.8 billion
The push by private equity firms to buy tech distributors continues, with Clayton, Dubilier & Rice agreeing to acquire Anixter International for about $3.8 billion.
The Lowdown: The deal, which is expected to close by the end of the first quarter of 2020, will result in Anixter becoming a private company.
The Details: Under the terms of the all-cash deal, CD&R will pay $81 per share of Anixter, about a 13% premium over the price of the network and security solution distributor’s stock as of Tuesday. On Wednesday, Anixter announced third-quarter sales of $2.2 billion, a 2% year-to-year increase, and a 2.6% jump in organic sales. Net income grew 25%, to $59.3 million.
Once the deal closes, current Anixter President and CEO Bill Galvin and other members of his executive team will continue to run the company.
Background: Private equity firms continue to show interest in major tech distributors. Most recently, Apollo Global reportedly submitted an unsolicited $5 bid for Tech Data, the world’s second-largest tech distributor. Ingram Micro has garnered the attention of several firms, even after it was bought by Chinese conglomerate HNA Group last year. Among them was Apollo, which showed interest in Ingram in December 2018. RRJ, an investment firm based in Hong Kong, in August reportedly also wanted to buy Ingram from HNA.
The Buzz: “We believe this transaction is in the best interest of Anixter and our stockholders,” said Galvin. “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’re 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.”
“Anixter is an exceptionally well-positioned industrial distributor with leading market positions and differentiated capabilities that deliver strong customer value,” said Nate Sleeper, partner at CD&R. 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.”