A national poll released by the Assn. of Equipment Manufacturers (AEM) found that voters strongly support federal funding for water pipelines...
The gross cash proceeds from the transaction are expected to be approximately $150 million
ESCO Technologies Inc. has signed an agreement to divest Aclara Technologies LLC to an affiliate of Sun Capital Partners Inc. The gross cash proceeds from the transaction are expected to be approximately $150 million, comprised of a $130 million purchase price plus approximately $20 million in cash related to specific Aclara receivables retained by ESCO. The agreement is also subject to normal working capital adjustments.
The sale is expected to close in March 2014, subject to customary closing conditions and the satisfaction of regulatory requirements. The net cash proceeds from the sale are estimated to be approximately $130 million after taxes and expenses, which will result in a net debt position of less than $10 million at March 31, 2014.
Post-closing, the company will have more than $600 million of available liquidity under its existing revolving credit facility, which it expects to efficiently deploy to support its strategy of profitable organic growth, accretive acquisitions around its existing core businesses, and opportunistic repurchases of outstanding shares.
For the quarter ending March 31, 2014, the company expects to recognize in discontinued operations a net book loss of approximately $50 million on the sale of Aclara. The amount will be finalized when the transaction closes and the adjustments set forth in the agreement are determined.
"This agreement creates an exciting opportunity for ESCO. After closing, and essentially debt free, ESCO will be a more strategically focused, higher margin business with a much steadier and predictable growth profile," said Vic Richey, ESCO's chairman and CEO. "This divestiture presents an improved outlook of our future and further enhances our ability to increase shareholder value.
"I would like to thank the Aclara employees and management for their outstanding contributions to ESCO over the years. Aclara and its employees have built a long track record of operational excellence and a strong commitment to customer success, and with Sun Capital's support, I am confident Aclara will continue to prosper."