GLENVIEW, Ill. — Anixter International Inc. (NYSE: AXE) today announced that it has entered into a definitive agreement to acquire Tri-Ed, a leading independent distributor of security and low-voltage technology products from Audax Group (“Audax”) for a purchase price of $420 million. The acquisition is expected to be accretive to earnings in the first full year of operation, exclusive of transaction and one-time integration expenses.
Headquartered in Woodbury, NY, Tri-Ed serves four major segments of the security business including video, access control, intrusion detection and fire/life safety, and provides approximately 110,000 products to over 20,000 active dealer and integrator customers. The company employs over 600 people across 63 locations in the US and Canada. The company’s multi-channel distribution strategy integrates branches, technical sales centers and an e-commerce platform. Tri-Ed generated approximately $570 million in sales and $36 million in adjusted EBITDA over the trailing twelve months ending June 30, 2014.
Bob Eck, Anixter’s President and CEO, stated, “The acquisition of Tri-Ed is a strategic opportunity for Anixter and our security business, consistent with our vision to create a leading global security platform and to accelerate profitable revenue growth. Through expanding our offering into highly complementary product lines, our customers will benefit from a broader set of products and solutions in the areas of video, access control, fire/life safety, and intrusion detection. As well, the combination brings Anixter’s expertise in IP video surveillance to Tri-Ed’s customers. In addition, this transaction provides access to the residential construction end market at an attractive point in the recovery cycle as well as to a community of security integrators and dealers not currently serviced by Anixter. We look forward to having the Tri-Ed team join the Anixter family when the transaction closes. Together we will be able to offer even better service and broader security solutions to our respective customers as well as substantial long term growth and value-creation for all Anixter stakeholders.”
Pat Comunale, Tri-Ed’s President and CEO, stated, “We have great respect for Anixter and are excited about the opportunities that this combination will create for our people and our business. We look forward to building on our long-standing supplier partnerships and customer relationships to create an even stronger security platform.”
Ted Dosch, Anixter’s Executive Vice President of Finance and CFO, stated, “Consistent with our stated priorities for capital allocation, the Tri-Ed acquisition accelerates the pace of growth in our security business, which is one of our strategic growth initiatives. We expect our strong cash flow generation will enable us to return to our target debt-to-capital range within 12 months, providing us with the continued financial flexibility that is a hallmark of our financial strategy.”
Subject to regulatory approval and certain customary closing conditions, this transaction is expected to close near the end of the third quarter of 2014 and will be financed using available cash and borrowings under a new term loan that is expected to be entered into prior to closing. The majority of transaction and integration costs will be incurred in fiscal years 2014 and 2015.
Greenhill & Co. served as financial advisor, Skadden Arps served as legal counsel, and KPMG served as accounting advisor to Anixter on the transaction.
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