Fortive Corporation (“Fortive”) (NYSE: FTV) today announced that it has
entered into a definitive agreement to combine four operating companies
from its Automation & Specialty platform (“A&S platform”) with Altra
Industrial Motion Corp (“Altra”) (NASDAQ: AIMC) in a tax-efficient
transaction, creating a pure-play, global leader in the power
transmission and motion control market. Total consideration to Fortive
and its shareholders is approximately $3.0 billion, including $1.4
billion in cash proceeds and debt reduction for Fortive and 35 million
newly issued Altra common shares to Fortive’s shareholders, valued at
approximately $1.6 billion based on the 20-day volume weighted average
stock price of Altra shares.
James A. Lico, President and Chief Executive Officer of Fortive, stated,
“We are excited about today’s announcement as it represents a major step
forward in our portfolio enhancement work towards increasing our focus
on software and service exposure, while adding significantly to our M&A
capacity. This business combination represents significant value
creation for both Fortive and Altra shareholders, customers and
employees.
“We have great respect for the Altra team and their commitment to
continuous improvement and customer satisfaction. This combination of
powerful brands and remarkable people creates an organization
well-positioned to capture robust Industry 4.0 growth opportunities,”
said Mr. Lico.
Carl Christenson, Chairman and CEO of Altra, stated, "This transaction
transforms Altra and represents a major milestone towards accelerating
our acquisition strategy. The addition of the A&S platform bolsters our
ability to compete effectively on a larger and more global scale in the
broader automation space, to further our continuous improvement journey,
and to optimize our portfolio in an expanded acquisition universe."
The A&S platform business includes the market-leading brands of
Kollmorgen, Thomson, Portescap and Jacobs Vehicle Systems. The A&S
platform generated approximately $907 million in revenue for its fiscal
year ended December 2017.
The combination will be effected as a Reverse Morris Trust, which is
expected to be tax-efficient to Fortive. Fortive shareholders will
receive shares representing approximately 54.4% of the issued and
outstanding shares of Altra after giving effect to the transaction and
valued at approximately $1.6 billion. In addition, Fortive will directly
receive added consideration of $1.4 billion through a combination of
cash proceeds and debt reduction.
Until closing, which is expected to occur by the end of 2018, the A&S
platform businesses will operate within the Industrial Technology
segment of Fortive, and financial results will be reported in continuing
operations.
Fortive will have the right to designate one member of Altra’s board of
directors, expected to initially be Patrick J. Murphy, Senior Vice
President of Fortive.
Transaction Overview
The combined revenue of Altra and the four A&S businesses on a trailing
12 months basis was approximately $1.8 billion, making it a leading
pure-play in power transmission and motion control.
Under the terms of the definitive transaction agreements, Fortive will
create a wholly-owned subsidiary to hold the A&S platform (the “A&S
subsidiary”) and will distribute ownership of that A&S subsidiary to
Fortive shareholders in either a split-off or spin-off transaction,
which will be followed by a merger of the A&S subsidiary with a
subsidiary of Altra. The A&S subsidiary will become a wholly owned
subsidiary of Altra. If Fortive elects a split-off, its shareholders
would have the opportunity to exchange their shares for the shares of
the A&S subsidiary. If Fortive elects a spin-off, the shares of the A&S
subsidiary will be distributed to all of its shareholders on a pro rata
basis. Fortive will determine which approach it will take prior to
closing the transaction.
In a split-off, Fortive expects the dilution impact to its net earnings
per diluted share would be approximately 8-9% on an annual basis as a
result of the distribution, which will likely be more than offset by the
significant increase in M&A capacity.
The transaction is expected to close by the end of 2018, subject to
customary closing conditions, including receipt of certain regulatory
approvals, Altra shareholder approval and the receipt by Fortive of
confirmation of the tax treatment of certain matters.
UBS Investment Bank served as financial advisor to Fortive and Skadden,
Arps, Slate, Meagher & Flom LLP served as legal counsel to Fortive.
Fortive and Altra will hold a joint conference call today at 8:30 a.m.
ET. The call and an accompanying slide presentation will be webcast on
the “Investors” section of the website,
www.fortive.com
,
under “Events & Presentations.” A replay of the webcast will be
available at the same location shortly after the conclusion of the
presentation.
The conference call can be accessed by dialing (866) 610-1072 (toll-free
domestic) or (973) 935-2840 (international); Conference ID: 9088998. A
replay of the call will be available for 7 days via telephone starting
approximately two hours after the call ends. The replay can be accessed
at (800) 585-8367 (toll-free domestic) or (404) 537-3406
(international); Conference ID: 9088998.
ABOUT FORTIVE
Fortive is a diversified industrial growth company comprised of
Professional Instrumentation and Industrial Technologies businesses that
are recognized leaders in attractive markets. With 2017 revenues of $6.7
billion, Fortive’s well-known brands hold leading positions in field
instrumentation, transportation, sensing, product realization,
automation and specialty, and franchise distribution. Fortive is
headquartered in Everett, Washington and employs a team of more than
26,000 research and development, manufacturing, sales, distribution,
service and administrative employees in more than 50 countries around
the world. With a culture rooted in continuous improvement, the core of
our company’s operating model is the Fortive Business System. For more
information please visit:
www.fortive.com
.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not strictly historical, including
statements regarding the expected effects of the proposed structure of
the transactions (the “Transaction”), the impact of the Transaction to
stockholders, employee or customers of Fortive or Altra Industrial
Motions, the anticipated timing and terms of the Transaction, the tax
treatment and tax benefit of the Transaction, the anticipated prospects
of the combined businesses and any other statements regarding events or
developments that Fortive or Altra believes or anticipates will or may
occur in the future, are “forward-looking” statements within the meaning
of the federal securities laws. There are a number of important risks
and uncertainties that could cause actual results, developments and
business decisions to differ materially from those suggested or
indicated by such forward-looking statements and you should not place
undue reliance on any such forward-looking statements. These risks and
uncertainties include, among other things, the ability of Fortive and
Altra to satisfy the conditions to the Transaction on a timely basis,
the parties’ ability to complete the Transaction on the anticipated
terms and schedule, including the ability to obtain regulatory
approvals, Altra shareholder approval and the anticipated tax treatment
for the Transaction, the risk that the Transaction will harm the
business of Fortive or Altra, and the risk of deterioration of or
instability in the business performance or in the general economy or
markets. Additional information regarding the factors that may cause
actual results to differ materially from these forward-looking
statements is available in Fortive’s most recent Annual Report on Form
10-K and in Altra’s most recent Annual Report on Form 10-K, in each
case, for the fiscal year ended December 31, 2017. These forward-looking
statements speak only as of the date of the statement is made, and
neither Fortive nor Altra assumes any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events and developments or otherwise.
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy, or a
solicitation of an offer to sell, any securities of Fortive Corporation
(“Fortive”), Stevens Holding Company, Inc. (“Newco”) or Altra Industrial
Motion Corp. (“Altra”). In connection with the proposed transaction,
Altra and Newco will file registration statements with the SEC
registering shares of Altra common stock and Newco common stock in
connection with the proposed transaction. Altra’s registration statement
will also include a proxy statement and prospectus relating to the
proposed transaction. Fortive shareholders are urged to read the
prospectus that will be included in the registration statements and any
other relevant documents when they become available, and Altra
shareholders are urged to read the proxy statement and any other
relevant documents when they become available, because they will contain
important information about Altra, Newco and the proposed transaction.
The proxy statement, prospectus and other documents relating to the
proposed transaction (when they become available) can also be obtained
free of charge from the SEC’s website at www.sec.gov.
The proxy statement, prospectus and other documents (when they are
available) can also be obtained free of charge from Fortive upon written
request to Fortive Corporation, Investor Relations, 6920 Seaway Blvd.,
Everett, WA 98203, or by calling (425) 446-5000 or upon written request
to Altra Industrial Motion Corp., Investor Relations, 300 Granite St.,
Suite 201, Braintree, MA 02184 or by calling (781) 917 0527.
PARTICIPANTS IN THE SOLICITATION
This communication is not a solicitation of a proxy from any security
holder of Altra. However, Fortive, Altra and certain of their respective
directors and executive officers may be deemed to be participants in the
solicitation of proxies from shareholders of Altra in connection with
the proposed transaction under the rules of the SEC. Information about
the directors and executive officers of Fortive may be found in its
Annual Report on Form 10-K filed with the SEC on February 28, 2018 and
its definitive proxy statement relating to its 2017 Annual Meeting filed
with the SEC on April 17, 2017. Information about the directors and
executive officers of Altra may be found in its Annual Report on Form
10-K filed with the SEC on February 23, 2018, and its definitive proxy
statement relating to its 2017 Annual Meeting filed with the SEC on
March 24, 2017.
Fortive Corporation
Lisa Curran
Vice President, Investor Relations
Telephone: (425) 446-5000
6920 Seaway Boulevard
Everett, WA 98203