06.07.16

Nortek to be Acquired by UK Investment Firm

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Nortek, Inc., parent company of Core Brands, has signed an agreement and plan of merger with UK public company, Melrose Industries PLC, a newly created wholly owned subsidiary of Melrose, for a reported $2.8 billion.

Under the terms of the Merger Agreement, Melrose will commence the offer as promptly as practicable and in any event by no later than July 11, 2016. Nortek will become a wholly owned subsidiary of Melrose.

"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 Chief Executive Officer 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, whose company has a track record of acquiring companies and turning them around at profit within a few years. "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 US businesses and we are confident that we can bring that expertise to build Nortek for the long term."

Melrose Industries is a UK listed public company with a focus on "acquiring high quality industrial manufacturing businesses with strong fundamentals whose performance can benefit from a change in circumstances."

Bloomberg reports that “Melrose is betting a strengthening of the U.S. economy will boost the construction sector, helping Nortek’s sales of kitchen range hoods, air conditioning and home-security systems. In keeping with its “buy, improve, sell” strategy for investments focused on industrial companies, Melrose said it’s identified opportunities to enhance the supply chain and information technology systems at Nortek, lighten the debt burden as well as making more use of a plant in Mexico.”