Melrose – whose strategic maxim is “buy, improve, sell” – said the addition of the Rhode Island outfit would be “significantly accretive” to headline earnings per share in the first full financial year of ownership and thereafter. Nortek’s shares were up 36.6 percent at $85.37 in premarket trading on Wednesday. Settlements with Nortek began in March and the deal was set to be announced by the end of June, soon after the Brexit vote, said a source close to Melrose.
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As I wait to hear back from both Nortek and Melrose for more on the particulars of this deal, the big question is: What kind of impact will this have back here in the USA, as Nortek is now in 18 million homes, and has positioned itself with the recent acquisition of Nuiku, a natural language processing company, as a leader in the area of smart home technology. “Only the courageous can pull off deals in this environment”, said the source close to Melrose. (“Nortek” or the “Company”) (NASDAQ GS: NTK) regarding possible breaches of fiduciary duties and other violations of law related to the Company’s entry into an agreement to be acquired by Melrose Industries PLC (“Melrose”), in a transaction valued at approximately $2.8 billion.
Two analysts said another player may counterbid for Nortek.
“Some investors are prepared to take on more risk because they have cash to deploy but it’s challenging to find a business proposition that still works”. Finance Director Geoffrey Martin stated Melrose would think about increasing investment in automation and new machinery for Nortek’s production facilities and looking for complementary acquisitions. Bank of America Merrill Lynch (BAC.N) served as joint underwriter and joint bookrunner.
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“We are very pleased to have reached the proposed agreement with Melrose Industries, which represents a significant premium for our shareholders”, said Nortek’s President and Chief Executive Officer Michael J. Clarke. Barclays and Citi advised Nortek.
