Greenbriar Equity Buys Division from Anixter International

Greenbriar Equity Group is buying the aerospace hardware division of Anixter International Inc., a distributor of communication and security products, electrical and electronic wire and cable and other parts. Greenbriar is paying $155 million in cash, and up to $30 million in additional milestone-based payments. The deal is expected to close in the third quarter.

PRESS RELEASE
Anixter International Inc., a global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts, announced that it has entered into a definitive agreement to sell its Aerospace Hardware Division to entities controlled by Greenbriar Equity Group.

Under the terms of the agreement Anixter reported that it will receive $155 million in cash, subject to a net working capital adjustment, and up to an additional $30 million if certain milestones are achieved on or before Dec. 31, 2013. The transaction is expected to be completed during the third quarter subject to regulatory approval and customary closing conditions.

Commenting on the transaction, Robert Eck, President and CEO of Anixter, said, “We believe this transaction is a positive development for all parties involved, as it captures what we view as a fair value for the Aerospace Hardware Division and enables us to focus our attention and resources on our core operations and strategic initiatives. Our performance in Aerospace Hardware has been strong since first entering the business through our 2002 Pentacon acquisition, having achieved first half 2011 revenues of approximately $94.1 million and EBITDA of $12.0 million. However, customer and supplier consolidation has resulted in a business model that is distinctly different than our overall model. Despite the fact that Aerospace has historically delivered operating margins in excess of our corporate average, current high working capital requirements have impacted its return on tangible capital compared to our other businesses; therefore this division is no longer strategically aligned with our overall business.” Eck continued, “Given Greenbriar’s significant focus in the aerospace sector, we are confident it will be a strong and supportive partner for the aerospace business and build upon its solid market position under new ownership.” Noah Roy, Managing Director of Greenbriar, said, “We believe that this transaction will enable the employees of the Aerospace Hardware Division to continue to provide outstanding service and supply chain value to their customers, the majority of which are the world’s leading aerospace manufacturers. We look forward to partnering with the current management team to grow the business and invest in the future success of this Division.” In the third quarter of 2011, the Company said that it will report the results of this business as “Discontinued Operations” and all prior periods will be restated to reflect this classification.

Eck concluded, “Anixter has successfully evolved its business for more than 50 years, and we will continue to focus our efforts toward those areas that fully leverage our operating platform and drive profitable growth. The sale of the aerospace business reinforces our commitment to invest in our core business and will enable us to better direct resources toward areas that will maximize shareholder value in both the near term and the long term, including potential share repurchases, further reducing borrowings, and making strategic acquisitions as market opportunities arise.” Anixter International is a global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts.

Greenbriar Equity Group is a private equity firm focusing exclusively on the global transportation industry, including companies in aerospace and defense, freight and passenger transport, automotive, logistics, and related sectors.