Private equity firm Clayton, Dubilier & Rice (CD&R) is acquiring Anixter International Inc., a network and security solutions distributor, for $3.8 billion. The deal is expected to close by the end of the first quarter of 2020, at which time Anixter will become a private company.
Updated January 6, 2020: CD&R will now pay $4.3 billion for Anixter in order to outbid a rival offer that surfaced during Anixter's 40-day "go shop" period. Original October 31, 2019 report continues below.
Under terms of the deal, Anixter CEO Bill Galvin and other members of the executive team will continue to lead the industrial distributor -- though the actual executive leadership list was not disclosed in a news release. Also, private equity deal involves a 40-day "go shop" period, which allows Anixter to solicit more lucrative buyout offers through December 9, 2019.
In a prepared statement, Galvin said:
“We believe this transaction is in the best interest of Anixter and our stockholders. 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.”
Added Nate Sleeper, partner at CD&R:
“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's areas of expertise include MRO (maintenance, repair and operations) supply; video surveillance applications; electric power distribution, and more.
Private Equity Firms Seek to Acquire Distributors
Private equity firms have been poking around multiple areas of the distribution market. For instance, Tech Data received a $5 billion takeover bid from private equity firm Apollo Global Management in mid-October. That alleged bid came roughly one year after Apollo attempted (but failed) to acquire Tech Data rival Ingram Micro from HNA Group. Ingram remains the topic of occasional takeover rumors.