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Anixter Auctioning Its Fasteners Division
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Anixter International put its fasteners division up for sale, according to the Financial Times of London. The move comes a year after Anixter failed to find a buyer for the whole company. "The sale of the fasteners division, which produces nuts, bolts and adhesives, is likely to fetch more than $500m, with final bids due later this month," the Times reports. The auction, which is being managed by Goldman Sachs, is reportedly attracting interest from the private equity sector rather than "strategic bidders." In 2014, Anixter OEM Supply - Fasteners sales edged up 0.3% to $938.5 million, with sales in North America gaining 1.7% to $396.2 million. Segment sales in Europe fell 6.1% to $445 million, while Emerging Markets sales increased 28.5% to $92.6 million, according to the FIN Stock Review. "The sale of the fasteners business comes at a time of feverish activity in global mergers and acquisitions, with the combination of cheap debt and rising corporate confidence driving levels of dealmaking not seen since the start of the financial crisis," according to the Times. Anixter tried to sell itself in early 2014, but the process stalled after buyers failed to agree on a price for the company. Anixter was seeking offers of more than $115 per share for a market value of $3.3 billion. In the months that followed, Anixter leadership - most notably outspoken billionaire Sam Zell - unloaded millions of Anixter shares, capitalizing on investor speculation that inflated the stock by as much as 70%, reported. Anixter began building its fastener business in 2002 by acquiring Pentacon for $111.4 million. After Pentacon, AFS bought Walters Hexagon in 2003, DDI in 2004, Infast in 2005 and MFU in 2006. In 2007 Anixter bought UK-based aerospace fastener distributor Eurofast SAS for $27 million and fastener distributor Total Supply Solutions for $8 million. The half a billion or so dollars Anixter Fasteners is expected to fetch at auction likely will come from private sources, fastener acquisition specialist Richard Hagan of NY-based Pinnacle Capital Corp. told "I would be surprised if Anixter Fasteners is not purchased by a private equity firm," Hagan stated. "In my opinion, if there was another industrial product distributor (strategic buyer) willing to pay the price Anixter management/ownership is seeking... that deal would have already happened." "I have no idea what the selling price will be... but if I gave you an estimate I would probably be way too low." Private equity deals in 2014 included Hillman acquiring Paulin; Elgin Fastener Group purchasing Vegas Fastener Mfg.; EFC International recapitalized by Quad-C Management Inc. in partnership with existing EFC ownership and senior management; and Carlson Systems Holdings purchasing Western Tool Supply.
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John Wolz, Editor of FIN