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THOMAS & BETTS TO ACQUIRE AMERICAN ELECTRIC FOR $432.5 MILLION

    THOMAS & BETTS TO ACQUIRE AMERICAN ELECTRIC FOR $432.5 MILLION
    BRIDGEWATER, N.J., Nov. 13 /PRNewswire/ -- Thomas & Betts Corporation (NYSE: TNB) and Forstmann Little & Co. announced today that a definitive agreement has been signed for Thomas & Betts to acquire FL Industries Holdings, Inc., know in the electrical industry as American Electric.  Total consideration is approximately $432.5 million. The closing is expected in early January 1992.
    Approximately $82.5 million of the total consideration is payable in the form of newly issued Thomas & Betts common stock, $342.5 million is payable in cash and will be used to discharge debt of American Electric, the remaining $7.5 million is debt of American Electric to be assumed by Thomas & Betts.  Thomas & Betts has received a commitment from Morgan Guaranty Trust Company of New York to provide up to $450 million in financing to pay the cash portion of the purchase price, to refinance existing indebtedness of Thomas & Betts and for general corporate purposes.
    T. Kevin Dunnigan, president and chief executive officer of Thomas & Betts, said, "This is an important strategic acquisition for Thomas & Betts which will create the largest electrical components manufacturer in North America.  It will also extend our market presence in several key product areas.  This acquisition creates opportunities for increasing international sales and operating efficiencies.  We will continue to maintain our strong position in worldwide electronic markets."
    Nicholas C. Forstmann, a general partner of Forstmann Little, said, "We formed FL Industries in 1985.  Our limited partners have already earned five times their original investment through a dividend paid in 1988.  Additionally, upon completion of the transaction, they will have $82.5 million of stock in Thomas & Betts, a company with a worldwide reputation for excellence."
    Thomas & Betts manufactures electrical and electronic connectors, components and systems for worldwide electrical and electronic markets. Sales in 1990 were $599 million with net earnings of $48.4 million or $2.84 per share.
    American Electric manufactures a broad range of electrical products which have brand name recognition with industrial, construction, utility and retail customers.  Brand names include Steel City(R), Blackburn(R), Superstrut(R), Hazlux(R), Anchor Metals, Meyer(R), and Electricpak. Its products complement the electrical products of Thomas & Betts and are offered largely through the same electrical distributors.  American Electric had 1990 sales of $456.7 million and operating earnings, before restructuring charges ($2.8 million) and other non-recurring items, of $46.2 million.  1990 depreciation totaled $14.0 million.
    Thomas & Betts currently expect to refinance, in early 1992, up to $300 million of the bank debt incurred for the acquisition with the proceeds of one or more public offerings of senior unsecured debt securities.  Based on informal discussions with Standard & Poor's and Moody's, the company anticipates that these debt securities will bear investment grade ratings.
    Thomas & Betts does not anticipate changing its quarterly dividend. A dividend covenant in the bank financing arrangements permits dividends to continue at the current rate or to be increased, provided that the dividend payout does not exceed 50 percent of earnings.  Thomas & Betts anticipates that there will be minimal earnings dilution in 1992 as a result of the acquisition, with a pick up in the earnings per share in 1993 on a pro forma basis, in each case without giving effect to any operating efficiencies created by the combination.
    Merrill Lynch & Co. advised Thomas & Betts with respect to this transaction.  Morgan Stanley & Co. advised Forstmann Little.
    Thomas & Betts is filing a Form 8-K with the Securities and Exchange Commission which describes the proposed acquisition and the businesses of Thomas & Betts and American Electric.
    Thomas & Betts Corporation is based in Bridgewater, N.J.  Any offering of debt securities by Thomas & Betts will be made only by means of a prospectus.
    -0-       11/13/91
    /CONTACT:  Robert V. Berry, senior vice president of Thomas & Betts, 908-707-2337; or Anna Cordasco or Tom Sanford of Adams & Rinehart, Inc., 212-557-0100, for Forstmann Little & Co./
    (TNB) CO:  Thomas & Betts Corporation; Forstmann Little & Co.;
     FL Industries Holdings, Inc. ST:  New Jersey IN:  CPR SU:  TNM FC-JT -- NY087 -- 4141 11/13/91 17:15 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 13, 1991
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