Actuant to become premier industrial tool company
Actuant Corporation has announced that it intends to solely focus on its Industrial Tools & Services (”IT&S”) segment and pursue a standalone strategy as a pure play industrial tools and services company. To achieve its objective, and consistent with its recent sale of Precision-Hayes and announced intent to sell the Cortland U.S. business, the Company has initiated a process to maximize the value of its remaining Engineered Components & Systems (“EC&S”) segment through a potential divestiture of the segment. No assurance can be given that any transaction will result from the EC&S sale process or as to its timing.
Randy Baker, President and Chief Executive Officer of Actuant, said, “Our transformation of Actuant over the last two years has resulted in a more focused, efficient company with a reinvigorated organic growth strategy. As part of these efforts, we completed an operational realignment at the end of fiscal 2018, creating two separate operating segments with independent strategies and footprints. Together with our Board of Directors and outside advisors, we determined that the prudent next step to best unlock the value of Actuant is to solely focus on our IT&S segment.
“Through our premier Enerpac brand, IT&S continues to generate superior operating profit margins and solid year-over-year core sales growth. Our goal is to create a world-class industrial tool company with best-in-class EBITDA margins in excess of 20% and positive fundamentals serving very attractive end-markets. A very fragmented tools industry and a strong acquisition pipeline positions IT&S well for future growth and significant shareholder value creation.”
Actuant’s IT&S segment serves a broad range of end markets through its primary business, Enerpac. It is a global leader in high-force hydraulic tools and equipment for diverse industrial and infrastructure applications, offering products used to increase productivity and make work safer and easier to perform. IT&S also provides joint integrity maintenance, repair, and leak sealing products and services for global oil and gas and power generation customers.
Actuant’s remaining EC&S segment primarily serves on and off-highway OEMs with highly engineered system-critical motion, actuation and control solutions. This segment goes to market under the CrossControl, Maximatecc, Elliott Manufacturing, Gits Manufacturing, Power-Packer and Weasler Engineering brands.
On the potential divestiture of the remaining EC&S segment, Mr. Baker added, “Through the improvements we have made in its core businesses over the last several years and recent portfolio rationalization efforts, EC&S has a strong foundation in place and a significant opportunity to grow and thrive under new ownership with flexibility to focus on the business and make the right investments for its continued success. We are confident that pursuing a sale is the best way to maximize value for Actuant’s shareholders while securing a positive future for EC&S and its talented employees around the world. Across Actuant, we remain focused on serving our customers and supporting all of our stakeholders as we take this next step to build on our momentum.”
In connection with today’s announcement, Actuant reiterated its existing capital allocation strategy to strengthen and invest in the IT&S business, maintain a strong balance sheet, pursue complementary strategic acquisitions in a disciplined manner, and return excess capital to shareholders through opportunistic share repurchases. Actuant believes this capital allocation strategy will enhance its position as a premier industrial tool company and its commitment to sustainable shareholder value creation.
You can read the press release by clicking here.