Applied Industrial Technologies, Inc. entered into an agreement to acquire FCX Performance, Inc. from Harvest Partners, LP and other shareholders for approximately $770 million.
January 09, 2018
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Applied Industrial Technologies Inc. (NYSE:AIT) entered into an agreement to acquire FCX Performance Inc. from Harvest Partners LP and other shareholders for approximately $770 million on January 8, 2018. Under the terms, the purchase price is subject to working capital adjustments, closing cash, closing indebtedness, purchase price escrow amount of $5 million, transaction tax benefit of $6.9 million, expense holdback of $0.25 million and estimated net advanced billings. The transaction will be financed with a new credit facility comprising a $780 million Term Loan A and $250 million revolver. The transaction is subject to completion of the Hart-Scott-Rodino (‘HSR’) waiting period and satisfaction of other customary conditions. The agreement was approved by Board and shareholders of Applied Industrial and shareholders of FCX Performance. On January 25, 2018 U.S. Federal Trade Commission issue an early termination notice of the waiting period under the HSR Act. The transaction is expected to close on the later of January 31, 2018, or two business days following expiration of the Hart-Scott-Rodino waiting period and satisfaction or waiver of certain other customary conditions. The transaction is expected to be dilutive in fiscal year 2018 ending June 30, 2018 by $0.11 to $0.21. The transaction is expected to be accretive in fiscal year 2019 by $0.10 to $0.20.
Robert W. Baird & Co. Incorporated and Stephens Inc. acted as financial advisors to FCX Performance. Oliver Brahmst, Brian Smarsh, Matt Hendy, Hannah Lee, Henrik Patel, Jeffrey Ii, Sang Ji, Jake Jung and Rebecca Farrington of White & Case LLP acted as legal advisors to FCX Performance. David A. Zagore of Squire Patton Boggs LLP acted as legal advisor to Applied Industrial. Robert W. Baird & Co. and Stephens Inc. acted as financial advisors to FCX Performance. Wilmington Trust, National Association acted as escrow agent in the transaction.
Applied Industrial Technologies, Inc. is a value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. The Companyâs segments include Service Center Based Distribution and Engineered Solutions. The Service Center Based Distribution segment operates through local service centers and distribution centers with a focus on providing products and services addressing the maintenance and repair of motion control infrastructure and production equipment. Its products include industrial bearings, motors, belting, drives, couplings, pumps, linear motion products, hydraulic and pneumatic components, filtration supplies, and hoses. The Engineered Solutions segment includes its operations that specialize in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic fluid power technologies, and engineered flow control products and services.
Applied Industrial Technologies, Inc. entered into an agreement to acquire FCX Performance, Inc. from Harvest Partners, LP and other shareholders for approximately $770 million.