Rexel today announced the sale of its operations in South East Asia to American Industrial Acquisition Corporation Group (AIAC), a private equity firm focusing on investment in the industrial sector.
The transaction includes the following seven South-East Asian countries in which Rexel was present: Thailand, Indonesia, Singapore, Vietnam, the Philippines, Macau, and Malaysia.
This decision is fully in line with Rexel’s midterm strategic plan presented on February 13, 2017, in which the Group made a priority of actively managing its portfolio to focus on the most attractive geographies and businesses. The divestment of all of its operations in South East Asia will allow Rexel to refocus its managerial efforts on its main geographies and to improve Group profitability.
As a reminder, based on full-year 2016 consolidated accounts, the disposal plan announced on February 13, 2017, once fully completed, should have the following financial impacts:
- A reduction of approximately $947 million USD (c. 800 million euros) of sales.
- A positive contribution of c. 25bps to the Group’s consolidated adjusted EBITA margin.
- A slight improvement in the leverage ratio.
Combined, the contribution to Rexel’s 2016 consolidated sales of the seven South East Asian countries amounted to $161.2 million USD (136 million euros) and $128 million USD (108 million euros) estimated for FY 2017, down 21% year-on-year on a constant and actual-day basis. Their contribution to Rexel’s 2016 adjusted consolidated EBITA was a gain of approximately $1.18 million USD (c. 1 million euros) and an estimated loss of $3.55 million USD (3 million euros) for 2017. Lastly, the impact on the leverage ratio is limited.
The divestment of South East Asia, including the operations announced in Q2 2017, represents about 17% of the entire disposal plan presented in February 2017, which should be completed by the end of 2018. This transaction should result in an estimated pre-tax loss of about $71 million USD (60 million euros).
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