Initiates Process to Divest Engineered Components & Systems Segment
MILWAUKEE--(BUSINESS WIRE)--
Actuant Corporation (the “Company” or “Actuant”) (NYSE: ATU) today
announced that the Company intends to solely focus on its Industrial
Tools & Services (”IT&S”) segment and pursue a standalone strategy as a
pure play industrial tools and services company. To achieve its
objective, and consistent with its recent sale of Precision-Hayes and
announced intent to sell the Cortland U.S. business, the Company has
initiated a process to maximize the value of its remaining Engineered
Components & Systems (“EC&S”) segment through a potential divestiture of
the segment.
Randy Baker, President and Chief Executive Officer of Actuant, said,
“Our transformation of Actuant over the last two years has resulted in a
more focused, efficient company with a reinvigorated organic growth
strategy. As part of these efforts, we completed an operational
realignment at the end of fiscal 2018, creating two separate operating
segments with independent strategies and footprints. Together with our
Board of Directors and outside advisors, we determined that the prudent
next step to best unlock the value of Actuant is to solely focus on our
IT&S segment.
“Through our premier Enerpac brand, IT&S continues to generate superior
operating profit margins and solid year-over-year core sales growth. Our
goal is to create a world-class industrial tool company with
best-in-class EBITDA margins in excess of 20% and positive fundamentals
serving very attractive end-markets. A very fragmented tools industry
and a strong acquisition pipeline positions IT&S well for future growth
and significant shareholder value creation.”
Actuant’s IT&S segment serves a broad range of end markets through its
primary business, Enerpac. It is a global leader in high-force hydraulic
tools and equipment for diverse industrial and infrastructure
applications, offering products used to increase productivity and make
work safer and easier to perform. IT&S also provides joint integrity
maintenance, repair, and leak sealing products and services for global
oil and gas and power generation customers.
Actuant’s remaining EC&S segment primarily serves on and off-highway
OEMs with highly engineered system-critical motion, actuation and
control solutions. This segment goes to market under the CrossControl,
Maximatecc, Elliott Manufacturing, Gits Manufacturing, Power-Packer and
Weasler Engineering brands.
On the potential divestiture of the remaining EC&S segment, Mr. Baker
added, “Through the improvements we have made in its core businesses
over the last several years and recent portfolio rationalization
efforts, EC&S has a strong foundation in place and a significant
opportunity to grow and thrive under new ownership with flexibility to
focus on the business and make the right investments for its continued
success. We are confident that pursuing a sale is the best way to
maximize value for Actuant’s shareholders while securing a positive
future for EC&S and its talented employees around the world. Across
Actuant, we remain focused on serving our customers and supporting all
of our stakeholders as we take this next step to build on our momentum.”
In connection with today’s announcement, Actuant reiterated its existing
capital allocation strategy to strengthen and invest in the IT&S
business, maintain a strong balance sheet, pursue complementary
strategic acquisitions in a disciplined manner, and return excess
capital to shareholders through opportunistic share repurchases. The
order of these priorities may vary based on share price, market
conditions, available capital, and other factors. The Board has
previously approved share repurchase programs pursuant to which
7,560,566 shares remain authorized for buy back. The Company believes
this capital allocation strategy will enhance its position as a premier
industrial tool company and its commitment to sustainable shareholder
value creation.
As a result of the Company’s announcement of its intent to divest EC&S,
the Company is currently performing impairment analyses of the EC&S
long-lived assets which could result in the Company recording non-cash
impairment charges in future periods, reflecting a write down of the
EC&S net assets to their net realizable value.
The Company intends to comment on, or provide updates regarding, these
matters (including the status of the divestiture or size of an
impairment) only when it determines that further disclosure is
appropriate or required. No assurance can be given that any transaction
will result from the EC&S sale process or as to its timing.
Baird is serving as Actuant’s financial advisor and Latham & Watkins LLP
is serving as its legal counsel on the contemplated divestiture of EC&S.
About Actuant Corporation
Actuant Corporation is a diversified industrial company serving
customers from operations in more than 30 countries. The Actuant
businesses are leaders in a broad array of niche markets including
branded hydraulic tools and solutions, specialized products and services
and highly engineered position and motion control systems. The Company
was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin.
Actuant trades on the NYSE under the symbol ATU. For further information
on Actuant and its businesses, visit the Company's website at www.actuant.com.
Safe Harbor Statement
Certain of the above comments represent forward-looking statements made
pursuant to the provisions of the Private Securities Litigation Reform
Act of 1995. Management cautions that these statements are based on
current estimates of future performance and are highly dependent upon a
variety of factors, which could cause actual results to differ from
these estimates. Among other risks and factors, Actuant’s results are
subject to general economic conditions, variation in demand from
customers, the impact of geopolitical activity on the economy, continued
market acceptance of the Company’s new product introductions,
uncertainties with respect to the timing and terms of any disposition,
the successful integration of acquisitions, restructuring, operating
margin risk due to competitive pricing and operating efficiencies,
supply chain risk, material and labor cost increases, tax reform,
foreign currency fluctuations and interest rate risk. See the Company’s
Form 10-K for the fiscal year ended August 31, 2018 filed with the
Securities and Exchange Commission for further information regarding
risk factors. Actuant disclaims any obligation to publicly update or
revise any forward-looking statements as a result of new information,
future events or any other reason.
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Investors
Actuant Corporation
Barb Bolens
VP Corporate Strategy &
Investor Relations
262-293-1562
Media
Joele Frank, Wilkinson Brimmer Katcher
Matthew Sherman / Nick
Lamplough / Aaron Palash
212-355-4449
Source: Actuant Corporation
Released January 24, 2019