Choosing to focus instead on its industrial, energy, and engineered solutions segments, diversified industrial specialist Actuant (ATU +0.11%) is jettisoning its electrical division, a move it expects to be completed in fiscal year 2014.
The electrical segment had some $308 million in sales over the last 12 months ending in February, down 4% from the year-ago period.
Actuant Robert C. Arzbaecher was quoted as saying: "We've outlined four areas of emphasis for growth, through both organic and acquisition strategies, which include energy, infrastructure, farm productivity and natural resources & sustainability. Actuant's three remaining segments are well positioned to build on these secular growth trends, further expand into emerging markets, and deliver superior long-term returns."
Actuant intends to use proceeds from the sale to fund acquisitions and return capital to shareholders via stock buybacks. Until a sale is effected, however, the division will be classified as discontinued operations, a reclassification the company expects to begin in the third quarter.
As a result of the move, Actuant expects to record a non-cash, after-tax charge of approximately $150 million from the writedown of the net assets held for sale to their net realizable value in the third quarter. Its reported results for the third quarter won't be comparable to the guidance it provided in March, though, on a comparable basis the company affirmed its prior guidance, which included sales of $410 million to $420 million and earnings of $0.63 to 0.68 per share.
The electrical division includes brand names like Gardner Bender, Marinco, Mastervolt, Acme, and Turner Electric. The segment employs 1,000 people in six locations around the world, with headquarters in Menomonee Falls, Wis. Actuant hired Robert W. Baird & Company to advise on the division's sale.
