Over Labor Day weekend 2019, Category 5 Hurricane Dorian hit the Bahamas head on, devastating the islands and destroying homes, infrastructure, communications and power. Anixter’s customers -LLA, Cable Bahamas and BTC - who supply voice, video, data and wireless services to the Bahamas, reached out to Anixter for help in supporting relief efforts for their employees and customers, while helping them get the islands’ communications infrastructure back up and running quickly. The Anixter team immediately dropped their Labor Day plans and got to work. On Monday, LLA sent a material list and, by Wednesday, Anixter had two cargo planes bound for the Bahamas stocked with the requested items, including food and supply kits for local families, blankets, sleeping bags, pillows, portable generators, flashlights, water, baby formula, diapers, medicine, large diesel generators to power cell sites, oil filters, fuel tanks, fusion sets and tools, batteries and more. Supporting relief efforts Chartering the planes and gathering the materials in two days meant the Anixter team was working 12- to 18-hour days. People across several departments and locations at Anixter, as well as LLA, all stepped up to support the relief efforts without complaint. Initial efforts were focused on emergency humanitarian items and power equipment. Once those needs were addressed, the work of rebuilding the communications infrastructure began. Anixter is supplying LLA with fiber optic cable as well as cabinets with full power plants and backup batteries that were custom designed for LLA by the Anixter team. Additionally, Anixter supplied BTC and Cable Bahamas with wireless systems and both point-to-point and point-to-multipoint radios, and are now sourcing mission critical network equipment to support BTC and Cable Bahamas with network rebuild projects. Customer health and safety “’People first’ is our motto at Anixter, so our top priority was helping our customers ensure the health and safety of their employees. Through our experience helping other customers in the wake of natural disasters, we have developed supplier contacts all over the world that are able to ship out emergency supplies at a moment’s notice. We are grateful for the dedication of our own team, as well as that of our customers and suppliers, who worked around the clock to bring relief to the Bahamas in this desperate time,” said Bill Galvin, president and CEO of Anixter. Rebuild projects are still underway, but significant progress has been made in such a short time due to LLA, BTC and Cable Bahamas taking a proactive approach to storm preparedness as well as Anixter’s timely response, hurricane experience and dedicated team.
Anixter International Inc., a distributor of network & security solutions, electrical & electronic solutions and utility power solutions, enters 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. The transaction will result in Anixter becoming a private company and is expected to close by the end of the first quarter of 2020. Under the terms of the merger agreement, CD&R-managed funds will acquire all of the outstanding shares of Anixter common stock for $81.00 per share in cash. Helping industrial distributors As a private company, we believe Anixter will have greater flexibility to focus on" This represents a premium of approximately 13% over Anixter’s closing price on October 29, 2019, and a premium of approximately 27% over the 90-day volume-weighted average price of Anixter’s common stock for the period ended October 29, 2019. “We believe this transaction is in the best interest of Anixter and our stockholders,” said Bill Galvin, Anixter’s President and Chief Executive Officer. “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.” Outstanding management team Nate Sleeper, Partner at CD&R, said, “Anixter is an exceptionally well-positioned industrial distributor with leading market positions and differentiated capabilities that deliver strong customer value. 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.” Anixter expects to hold a Special Meeting of Stockholders to consider and vote on the proposed merger It is anticipated that upon completion of the transaction, Bill Galvin, along with other members of Anixter’s executive management team, will continue to lead the company. Anixter’s Board of Directors has unanimously approved the agreement with CD&R and recommends that Anixter stockholders approve the proposed merger and merger agreement. Anixter expects to hold a Special Meeting of Stockholders to consider and vote on the proposed merger and merger agreement as soon as practicable after the mailing of the proxy statement to its stockholders. Fully committed financing The transaction is subject to the approval of Anixter’s stockholders, regulatory approvals and other customary closing conditions. The transaction has fully committed financing and is not subject to any condition with regard to the financing. Equity financing will be provided by Clayton, Dubilier & Rice Fund X, L.P., an approximately $10 billion pool of equity capital managed by CD&R; committed debt financing has been obtained from Bank of America, J.P. Morgan, Deutsche Bank Securities Inc. and Credit Suisse. Certain stockholders of Anixter, including entities associated with Sam Zell, Chairman of the Anixter Board, which own approximately 9% of the outstanding shares of Anixter common stock, have entered into a voting agreement with CD&R, pursuant to which they have agreed, among other things, to vote their shares of Anixter common stock in favor of the merger. Provisions of the merger agreement Under the terms of the merger agreement, Anixter may solicit superior proposals from third parties for a period of 40 calendar days continuing through December 9, 2019. In accordance with the merger agreement, Anixter’s Board of Directors, with the assistance of its advisors, intends to solicit superior proposals during this period. Anixter would be obligated to pay a $45 million break-up fee to CD&R In addition, Anixter may, at any time, subject to the provisions of the merger agreement, respond to unsolicited proposals that are reasonably likely to result in a superior proposal. Anixter advises that there can be no assurance that the solicitation process will result in an alternative transaction. To the extent that a superior proposal received prior to December 9, 2019 or, in certain circumstances, 10 days thereafter leads to the execution of a definitive agreement, Anixter would be obligated to pay a $45 million break-up fee to CD&R. Financial advisors for The solicitation process Anixter does not intend to disclose developments with respect to this solicitation process unless and until it determines it is appropriate to do so. Centerview Partners LLC is serving as lead financial advisor, Wells Fargo Securities, LLC is also serving as financial advisor and Sidley Austin LLP is serving as legal advisor to Anixter in connection with the transaction. BofA Securities, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Credit Suisse are serving as financial advisors to CD&R, and Debevoise & Plimpton LLP is serving as legal advisor to CD&R.
The fragmented nature of the security and safety equipment market has brought manufacturers, integrators and other market players together to drive the need for integrated, interoperable systems. As a global distributor of Network and Security Solutions, Anixter Inc. has joined the Open Security & Safety Alliance, a new partnership of global security, safety and building automation organizations, to help develop a framework of common standards, best practices and specifications that address shared challenges and provide common ground for innovation. “Across all segments of our business, our customers are demanding technologies that empower their connected buildings and smart spaces,” said Anixter’s CEO Bill Galvin. “These transformative environments have increased in scale and complexity with the rapid adoption of IoT and open architectures.” Galvin continued, “We believe the Alliance will play an integral role in propelling the security, safety and building automation industries to help our customers drive innovation and operational efficiency.” Improve customer business operations The five founding members of the Alliance are Bosch Building Technologies, Hanwha Techwin, Milestone Systems, Pelco by Schneider Electric and VIVOTEK Inc. Other early Alliance members include Ambarella Inc., AndroVideo, Kings Secure Technologies, Wavestore Global Ltd., SOCIONEXT Inc., Topview Optronics Corp., Aitek S.p.A. and Security and Safety Things GmbH. “The way we use and interact with technology in the security, safety and building automation industries is transforming at a rapid pace,” commented Galvin. “These technology innovations will be critical intelligent components of our new connected world. As an active member of the Alliance, we look forward to the opportunity to work with talented organizations and individuals to help deliver these innovations and to help customers build solutions that provide intelligent insights to improve their business operations and processes.”
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