Actuant to Become Premier Industrial Tool Company
January 24 2019 - 8:30AM
Business Wire
Initiates Process to Divest Engineered
Components & Systems Segment
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190124005201/en/
Investors
Actuant CorporationBarb BolensVP Corporate Strategy &
Investor Relations262-293-1562
Media
Joele Frank, Wilkinson Brimmer KatcherMatthew Sherman / Nick
Lamplough / Aaron Palash212-355-4449
Actuant (NYSE:ATU)
Historical Stock Chart
From Mar 2024 to Apr 2024
Actuant (NYSE:ATU)
Historical Stock Chart
From Apr 2023 to Apr 2024