Clayton, Dubilier & Rice to Acquire Anixter International for $3.8 Billion in Cash

Anixter International, Glenview, IL, entered into a definitive agreement with an affiliate of the Clayton, Dubilier & Rice (CD&R) private-equity firm to be acquired in an all-cash transaction valued at approximately $3.8 billion.

The transaction will result in Anixter, the largest wire and cable specialist in the world, becoming a private company and is expected to close by the end of the first quarter of 2020, according to the press release. Electrical Wholesaling’s 2019 Top 200 ranks Anixter as the fourth largest distributor of electrical supplies in North America.
Under the terms of the merger agreement, CD&R-managed funds will acquire all of the outstanding shares of Anixter common stock for $81 per share in cash. This represents a premium of approximately 13% over Anixter’s closing price on Oct. 29, and a premium of approximately 27% over the 90-day volume-weighted average price of Anixter’s common stock for the period ended Oct. 29.

Over the years, CD&R has had quite a few industrial distributors in its portfolio. It currently owns Beacon Roof Supply, said to be the largest publicly-traded distributor of residential and commercial roofing materials and related building products in the United States, and SunSource, a distributor of fluid power and motion control technologies.
CD&R also owned WESCO before selling the company in 1998 to the Cypress Group and before WESCO Distribution Inc.’s initial public offering in 1999. CD&R also at one time had a big stake in Rexel through Ray Investment, which according to a 2013 post on www.pehub.com is a partnership controlled by CD&R, Eurazeo, Bank of America, Merrill Lynch and a Canadian pension fund manager. Ray Investment no longer has a stake in Rexel.

Bill Galvin, Anixter’s president and chief executive officer, said in the press release that CD&R’s experience with industrial distributors was one of the major reasons Anixter’s board of directors approved the sale to CD&R.

“We believe this transaction is in the best interest of Anixter and our stockholders,” he said. “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 a track record of success in helping industrial distributors like Anixter prosper and grow. We are also pleased this transaction appropriately recognizes the value of Anixter’s customer relationships, technology and solutions, financial management and global market position. It’s a great outcome for Anixter’s employees, customers and partners. As a private company, we believe Anixter will have greater flexibility to focus on and accelerate our long-term strategic priorities.”

The press release said that it’s 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 has been an active acquirer itself over the years, most recently with its 2015 purchase of HD Supply Power Solutions for $825 million in cash. That acquisition gave Anixter a lead position in the utility distribution niche, where HD Supply was the largest player. According to Electrical Marketing’s acquisition database, Anixter made at least 11 other acquisitions in addition to HD Supply from 2002 to 2014, including World Class Wire & Cable, Waukesha, WI, and Tri-Ed Distribution, Woodbury, NY. The company had also made several acquisitions to expand into fasteners, but sold its OEM Supply-Fasteners unit to American Industrial Partners (AIP) for $380 million in cash in 2015.