Midwest HVAC News
Nortek Positions Itself as
Major Air Management Supplier with Acquisition of Thomas &
Betts' HVAC Business.
Company Signs Definitive Agreement to Acquire
Global Manufacturer of Commercial HVAC Equipment, Including
Well-Known Reznor® Brand, for $260 Million in Cash.
Nortek, Inc. (Nasdaq: NTK), a global diversified manufacturer of
innovative, air management and technology-driven products and
solutions for residential and commercial applications, today
announced it has signed a definitive agreement to acquire the
heating, ventilation and air conditioning (HVAC) business of Thomas
& Betts Corporation, which is a wholly owned subsidiary of ABBLtd (VTX:
ABBN), a global power and automation company. Wells Fargo
Securities, LLC served as exclusive financial advisor to Nortek.
Under the terms of the agreement, Nortek will pay approximately $260
million for Thomas & Betts' HVAC Business ("T&B HVAC") in an
all-cash transaction. T&B HVAC includes Reznor Manufacturing
Company, LLC (U.S.), AmbiRad Ltd (U.K.), Reznor Europe, N.V.
(Belgium), Gaz Industrie S.A.S. (France) and manufacturing
operations in Monterrey, Mexico.
T&B HVAC designs, manufactures and sells unit heaters, radiant
heaters and rooftop heating, ventilation and cooling products for
industrial and commercial applications primarily in North America
and Europe. Principal end-use applications for T&B HVAC products
include warehouses, factories, restaurants, retail locations and
institutions and other applications.
Net sales of T&B HVAC were approximately $160 million in 2013. The
transaction is expected to close during the second quarter of 2014,
subject to customary closing conditions including approval pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
"Acquiring this business will enable us to extend our air management
business into attractive adjacent segments of the HVAC market in the
United States and Europe," said Nortek President and Chief Executive
Officer Michael J. Clarke. "This business will help link three of
our five major segments in the air management category, which
include our Residential Ventilation (RESV), Residential Heating and
Cooling (RHC) and Custom and Engineered Solutions (CES) segments.
In the U.S., we will be adding the well-respected Reznor brand and
related products to those of Nordyne's residential and light
commercial brands along with our other well-known brands, such as
Broan®, Mammoth® and Huntair®. In Europe, we will be complementing
our Eaton-Williams business with the businesses of AmbiRad, Gaz
Industrie and Reznor. We look forward to welcoming T&B HVAC's global
community of employees and customers into Nortek's growing worldwide
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Nortek intends to
finance the purchase price of approximately $260 million, to
repay approximately $93 million of outstanding indebtedness
under the existing senior secured term loan, and to pay related
fees and expenses with proceeds of an approximately $350 million
senior secured term loan (the "Term Loan Facility") and cash on
hand. Nortek has received committed financing for the Term Loan
Facility from a group of financial institutions including Wells
Fargo Bank, National Association; Wells Fargo Securities, LLC;
Royal Bank of Canada; RBC Capital Markets; UBS AG Stamford
Branch and UBS Securities LLC as set forth in a commitment
letter executed contemporaneously with the definitive purchase
ABB (www.abb.com) is a leader in power and automation
technologies that enable utility and industry customers to
improve performance while lowering environmental impact. The ABB
Group of companies operates in around 100 countries and employs
about 150,000 people. Thomas & Betts was acquired by ABB in 2012
and is part of ABB's Low Voltage Products division.
Nortek* is a global, diversified company whose many
market-leading brands deliver broad capabilities and a wide
array of innovative, air management and technology-driven
products and solutions for lifestyle improvement at home and at
work. The company's broad array of offerings includes
ventilation products, heating and cooling products, and air
management systems, security systems and digital display