ESCO Technologies Inc: ESCO Announces Agreement to Divest Aclara
ST. LOUIS, March 17, 2014 - ESCO Technologies Inc. (NYSE: ESE) today announced
that it 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 over $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.
Vic Richey, ESCO's Chairman and Chief Executive Officer, commented, "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. 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."
Stephens Inc. acted as the exclusive financial advisor to ESCO on this
transaction, with Bryan Cave LLP serving as the Company's legal advisor.
Statements in this press release regarding the certainty and timing of closing
the transaction, the net cash realized, the net debt position and the ability
to pay down the Company's outstanding debt, and the realization of the book
loss and other statements which are not strictly historical are
"forward-looking" statements within the meaning of the safe harbor provisions
of the Federal Securities Laws. Investors are cautioned that such statements
are only predictions and speak only as of the date of this release, and the
Company undertakes no duty to update them except as may be required by
applicable laws or regulations. The Company's actual results in the future may
differ materially from those projected in the forward-looking statements.
Factors that could cause actual results or events to differ materially from
those indicated by such forward-looking statements, include: 1) material
changes in the Aclara business impacting the closing of the transaction, 2)
the final working capital adjustment and total transaction costs in connection
with the Aclara divestiture, 3) tax elections made by Aclara after closing, 4)
the other factors described in Item 1A, Risk Factors, of the Company's annual
report on Form 10-K for the year ended September 30, 2013 and in the Company's
Form 10-Q for the three months ended December 31, 2013.
ESCO, headquartered in St. Louis, provides engineered filtration products to
the aviation, space and process markets worldwide and is the industry leader
in RF shielding and EMC test products. In addition, the Company provides
diagnostic instruments, services, and the world's premier library of
statistically significant apparatus test results for the benefit of energy
generation, transmission, delivery companies and industrial power users
worldwide. More information regarding ESCO and its subsidiaries is available
on the Company's website at www.escotechnologies.com.
SOURCE ESCO Technologies Inc.
Kate Lowrey, Director of Investor Relations, (314) 213-7277
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf
of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein.
Source: ESCO Technologies Inc via Globenewswire
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