Nortek Acquired for $2.8B by Melrose Industries

Nortek President and CEO Michael J. Clarke believes this partnership will enhance its brands and market positions.

PROVIDENCE, R.I. — Nortek announced on Wednesday that it will be acquired by Melrose Industries and Nevada Corp for approximately $2.8 billion at $86 per share in cash.

The agreement was unanimously approved by Nortek’s and Melrose’s Boards of Directors.

“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 CEO Michael J. Clarke. “We believe this partnership with Melrose will enhance Nortek’s ability to further leverage its industry-leading brands and market positions to continue driving profitable growth. We believe this transaction will be a positive for our employees and customers alike.”

“We have watched and admired Nortek’s progress and we are convinced we can steer this fine business to achieve its full potential,” said Melrose’s Chairman Christopher Miller. “We see a company full of hard-working, dedicated people who are really good at what they do. We can harness those strengths by meaningful long term investment and a vision based on our own experience in similar and relevant markets down the years. Melrose has been a highly successful custodian and builder of U.S. businesses and we are confident that we can bring that expertise to build Nortek for the long term.”

Here is more info on Melrose from the press release on the announcement:

Melrose Industries is a UK listed public company. The company’s focus is to acquire high quality industrial manufacturing businesses with strong fundamentals whose performance can benefit from a change in circumstances. The strategy is based on supporting and incentivizing management teams to transform and grow their businesses without the burden of quarterly reporting or restrictive financing covenants, achieving above market profit growth and increased operating margins. Through a combination of overhead reduction and gross margin expansion, achieved through targeted investment in portfolio businesses, Melrose has been able to increase headline operating margins by five to nine percentage points in all historical investments. Melrose employs low levels of leverage but invests heavily in its businesses. On average, Melrose invests a further third of the original purchase price in its businesses post-acquisition.

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