Superior Essex Inc., one of the largest wire and cable manufacturers in North America, has agreed to acquire selected assets of Belden Inc.’s North American communications wire and cable business.
Under the terms of the agreement, Superior Essex Communications LLC will purchase selected inventories, machinery and equipment and will assume customer contracts related to Belden’s North American outside plant communications wire and cable business. The total purchase price, which is subject to adjustment based upon inventory levels at closing, will not exceed $95 million.
Completion of the transaction is subject to regulatory approvals, obtaining the requisite financing and other customary terms and conditions.
The proposed acquisition excludes, among other things, Belden’s communications wire and cable operations in the United Kingdom, the real estate located at Belden’s Phoenix, Arizona and Fort Mill, S.C., facilities, and accounts receivable. Except for obligations under customer contracts, Superior Essex will not assume any liabilities, including any employee-related obligations or any liabilities related to Belden plant shutdown costs.
C. Baker Cunningham, chairman, president and chief executive officer of Belden, said that given the lower level of demand that has characterized the telecommunications market in the United States for the past two years, the company had not been able to maintain profitability in the North American communications business.
He added that the company would focus on the electronics and data networking markets, and the execution of its planned merger with Cable Design Technologies Corp. Belden announced in February that it planned to join forces with CDT in a merger of equals, which is expected to be completed during the second quarter of 2004.
“This acquisition will more appropriately align capacity in the outside plant copper communications cable industry with demand, which has declined 50 percent in North America since 2000,” said Stephen M. Carter, chief executive officer of Superior Essex. “We have responded to this decline by consolidating our manufacturing facilities and reducing capacity, but the need to serve our customers with the most efficient production now requires us to look beyond internal solutions. We are confident that we will be able to smoothly transition Belden’s customer base, which last year generated approximately $200 million in revenues, and meet their ongoing needs without disruption. We believe that our reputation for outstanding service and product quality will allow us to retain a significant portion of this business.”