Private equity firm The Carlyle Group has agreed to acquire Sequa Corporation, a diversified manufacturer with operations in the aerospace and defence sector, in a transaction valued at US
Private equity firm The Carlyle Group has agreed to acquire Sequa Corporation, a diversified manufacturer with operations in the aerospace and defence sector, in a transaction valued at USD2.7bn, giving shareholders a 54 per cent premium to the share price on July 6. The company’s operations are organised around seven operating units in industries including aerospace, automotive, metal coating, specialty chemicals and industrial machinery.
‘Today’s announcement is the result of a careful and thorough analysis conducted by our board of directors and a transaction committee of independent directors established by the board to oversee the evaluation process,’ says Sequa chairwoman Gail A. Binderman.
‘This company, which was created by my father, Norman E. Alexander, more than five decades ago, has thrived by following the principles he established and the standards he set. We made this decision because we felt that it was the best way to deliver maximum value to our stockholders. Carlyle has a demonstrated track record of investing in and improving the companies it acquires and has great financial and operational expertise.’
Peter Clare, a Carlyle managing director and head of the global aerospace and defence sector team, says: ‘Sequa is an outstanding business thanks to the solid foundation the Alexander family has created and due to the high quality of the company’s existing management team.’
His colleague Adam Palmer, another managing director, adds: ‘We are impressed by the advanced technology and industry leadership positions Sequa maintains in multiple sectors. Carlyle is uniquely positioned with deep industry expertise across these various businesses to support the future plans of the company. We are committed to working with Sequa to extend its market reach through both internal and external growth strategies.’
Under the terms of the agreement, which is subject to the approval of Sequa stockholders, the company may solicit acquisition proposals from third parties up to August 23. The transaction is expected to close in the fourth quarter.
The executors of the estate of Norman Alexander and various entities owned or controlled by them, which hold in total 54 per cent of the outstanding voting power of the company, have agreed to vote all of their shares in favour of the transaction. Following the completion of the deal, the sale proceeds are expected to fund a charitable trust.
Evercore Group is acting as financial advisor to Sequa, and Cahill Gordon & Reindel is its legal advisor. Lehman Brothers, Citigroup and JPMorgan are financial advisors to Carlyle and are providing external debt financing, while Latham & Watkins is Carlyle’s legal advisor. Debevoise & Plimpton and Hartman & Craven are legal advisors to the Alexander family.
