(RTTNews) – Melrose Industries Plc. (MRO.L) said on Monday it has reached a deal to sell its Nortek Air Management business to Chicago-based Madison Industries for about 2.62 billion pounds, or $ 3.625 billion, in cash.
The consideration for the divestiture is based on an enterprise value of approximately $ 3.625 billion. Consideration is payable on completion, subject to certain adjustments.
Completion is conditional, among other things, on customary antitrust approvals and shareholder approval at a general meeting of shareholders of Melrose.
The Nortek Air Management business comprises the Nortek Global HVAC and Air Quality & Home Solutions segments.
Melrose said he intended to use some of the net proceeds to reduce debt and contribute around $ 100 million to GKN UK’s defined benefit pension plans.
In addition, a portion of the net proceeds will be returned to shareholders.
The finalization of the sale is expected to take place in the second or third quarter of 2021 and is conditional, among other things, on shareholder approval.
Melrose bought Nortek in 2016 for 2.2 billion pounds or $ 2.8 billion.
The activities of Ergotron and Nortek Control, which are also part of the Nortek Group, remain company property and will be completed in due course.
Baird and Citigroup Global Markets Inc. are acting as joint financial advisers, and Simpson Thacher & Bartlett LLP is acting as legal counsel to Melrose.
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