Textron Inc. announced June 1 that it has reached a definitive agreement to sell its Fastening Systems business to Platinum Equity, a private equity investment firm located in California, for total cash consideration of $630 million plus the assumption of certain liabilities.
Cash proceeds after taxes and transaction costs are expected to be approximately $670 million. The transaction is subject to certain closing adjustments and is expected to close during the third quarter, pending customary regulatory reviews.
This move marks Textron's complete exit from the fastening business and follows the company's strategic evaluation and active marketing process for the unit, announced on September 6 and December 7, 2005, respectively.
"This transaction is a win-win for all parties," said Lewis B. Campbell, Textron's chairman, president and CEO. "Platinum Equity is gaining a world-class business in Textron Fastening Systems, including the most advanced fastening technologies on the market and one of the best management teams in the industry, while we are extremely pleased to make this important shift in our portfolio."
The sale further advances Textron's portfolio strategy, which has included the divestiture of several non-core manufacturing businesses representing more than $4.4 billion in annual revenues and $1.4 billion in finance receivables from its Textron Financial unit.
"In 2001, we set a new course for Textron, making a commitment to redefine our portfolio and invest in those businesses that aligned best with our core strategy for truly meaningful growth," said
As previously disclosed, an additional after-tax impairment charge will be recorded in discontinued operations during the second quarter. Based on the estimated impact of transaction terms, the additional charge is now expected to be about $120 million.
