International. Anixter announced the signing of a definitive agreement with a subsidiary of Clayton, Dubilier & Rice ("CD&R") to be acquired in a 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, the funds managed by CD&R will acquire all outstanding shares of Anixter's common stock for $81.00 per share in cash. 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 shareholders," said Bill Galvin, President and Chief Executive Officer of Anixter. "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 track record of success in helping industrial distributors, such as Anixter, thrive and grow. We are also pleased that this transaction adequately recognizes the value of Anixter's customer relationships, technology and solutions, financial management and global market position. It's a great result for Anixter employees, customers and partners. As a privately held company, we believe Anixter will have greater flexibility to focus on and accelerate our long-term strategic priorities."
Nate Sleeper, Partner at CD&R, said: "Anixter is an exceptionally well-positioned industrial distributor with market-leading positions and differentiated capabilities that deliver strong customer value. We look forward to partnering with the excellent management team, led by Bill Galvin, on initiatives to grow the business and further strengthen its competitive position, while maintaining Anixter's distinctive culture of operational excellence, innovation and an unwavering commitment to the company's employees and customers. and global partners."
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 unanimously approved the agreement with CD&R and recommends that Anixter shareholders approve the proposed merger and merger agreement. Anixter expects to hold a Special Shareholders' Meeting to consider and vote on the proposed merger and merger agreement as soon as possible after the issuance of the proxy statement to its shareholders.
The transaction is subject to anixter shareholder approval, regulatory approvals and other customary closing conditions. The transaction has fully committed the financing and is not subject to any conditions with respect to the financing. Clayton, Dubilier & Rice Fund X, L.P., an approximately $10 billion equity fund managed by CD&R will provide equity financing. The committed debt financing was obtained from Bank of America, J.P.Morgan, Deutsche Bank Securities Inc. and Credit Suisse. Certain shareholders of Anixter, including entities associated with Sam Zell, Chairman of the Board of Anixter, who own approximately 9% of the outstanding shares of Anixter's common stock, have entered into a voting agreement with CD&R, pursuant to which they have agreed, among other things, to vote their anixter common shares in favor of the merger.
Under the terms of the merger agreement, Anixter may solicit superior proposals from third parties for a period of 40 calendar days until December 9, 2019. Pursuant to the merger agreement, Anixter's Board of Directors, with the assistance of its advisors, intends to solicit superior proposals during this period. In addition, Anixter may, at any time, subject to the provisions of the merger agreement, respond to unsolicited proposals that may reasonably result in a superior proposal.
Anixter informs that the application process cannot be guaranteed to result in an alternative transaction. To the extent that a higher proposal received before December 9, 2019 or, in certain circumstances, 10 days later leads to the execution of a definitive agreement, Anixter would be required to pay a $45 million breakdown fee to CD&R.
Anixter further assured that it does not intend to disclose developments regarding this application process unless and until it determines that it is appropriate to do so.
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