Anixter sells Fasteners unit to AIP for $380M; will focus on enterprise cable, security, wiring segments

Anixter International Inc. (NYSE: AXE) announced that it has entered into a definitive agreement to sell its OEM Supply – Fasteners segment to American Industrial Partners (AIP) for $380 million in cash, subject to certain post-closing adjustments. The transaction, which was approved by Anixter’s Board of Directors, is expected to close during the second quarter of 2015, subject to customary closing conditions and regulatory approval.

“This transaction follows significant progress by the Fasteners team in delivering improved operating performance and benefits to all stakeholders,” commented Bob Eck, president and CEO of Anixter. “Following the transaction, Anixter will have a sharper strategic focus on our core Enterprise Cabling & Security Solutions (ECS) and Electrical and Electronic Wire & Cable (W&C) segments, and additional financial flexibility to build on these strong global platforms through organic investments, as well as strategic acquisitions, allowing us to continue to deliver long-term value to shareholders. For Fasteners, this transaction will provide access to additional operational expertise and financial resources to drive continued growth in its industry,” he added.

The distributor notes that its Fasteners segment is known as a leading global distributor and manufacturer of highly-engineered fasteners for customers in the heavy truck, power train, luxury automotive, agriculture, construction, recreational vehicles and other verticals. Anixter's Fasteners unit serves customers in 15 countries, and the average relationship among its 10 largest customers exceeds 17 years, notes the distributor. The business reported 2014 revenues of $938.5 million and operating profit of $39.1 million.

“We have great respect for Fasteners, which is widely recognized as a leading global OEM supplier,” said Eric Baroyan, partner at AIP. “With deep, long-standing customer relationships, strong management, a highly customized product portfolio and significant global growth opportunities, Fasteners is well-positioned to accelerate its business performance. We are fully supportive of their strategic plan, and look forward to collaborating with their talented team to build long-term value for customers, suppliers and employees.”

Anixter's existing Fasteners business includes 73 distribution centers, 12 quality labs and more than 1,900 employees worldwide. Upon closing, Fasteners will continue to be led by its current management team, with Ian Clarke assuming the role of president and CEO of the new company. The company’s headquarters will remain in Glenview, Illinois, and the name of the new company will be announced upon closing.

“I am confident that we have found the right partner in AIP, who brings deep operating and industry expertise as well as additional financial resources, which will enhance our ability to meet the needs of our customers and capitalize on global growth opportunities,” said Clarke, current executive vice president – Fasteners at Anixter. “Today’s announcement reflects the value the Fasteners team has created, as well as AIP’s confidence in our strategy and exciting future. We look forward to working with AIP as we continue to build on our strong foundation and create long-term value for all of our stakeholders.”

According to a press statement, AIP has also offered to acquire the portion of Anixter's Fasteners business in France that has historically supported Fasteners’ global business. Goldman, Sachs & Co. served as financial advisor and Sidley Austin LLP served as legal counsel to Anixter in the current deal. Baker Botts LLP served as legal counsel to AIP.