(RTTNews) - Melrose Industries Plc. (MRO.L) announced Monday that it has entered into an agreement to sell its Nortek Air Management business to Chicago-based Madison Industries for about 2.62 billion pounds or $3.625 billion, in cash.
The consideration for the disposal is based on an enterprise value of approximately $3.625 billion. The consideration is payable on completion, subject to certain adjustments.
Completion is conditional upon, amongst other things, customary antitrust approvals and the approval of the Shareholders at a General Meeting of Melrose Shareholders.
Nortek Air Management business comprises the Nortek Global HVAC and Air Quality & Home Solutions segments.
Melrose said it intends to use part of the net proceeds to reduce debt and contribute around 100 million to the GKN UK defined benefit pension schemes.
Further, a portion of the net proceeds will be returned to shareholders.
Completion of the disposal is expected to occur in the second or third quarter of 2021 and is conditional upon, amongst other things, shareholder approval.
Melrose bought Nortek in 2016 for 2.2 billion pounds or $2.8 billion.
Ergotron and Nortek Control businesses which also form part of the Nortek group remain under the company's ownership and will be realised at an appropriate time.
Baird and Citigroup Global Markets Inc. are acting as joint financial advisers, and Simpson Thacher & Bartlett LLP is acting as legal adviser, to Melrose.
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