- Immediately Accretive to Revenue Growth, EBITDA Margin,
Operating Margin, EPS and FCF
- Amran/Narayan Grew Revenue at ~30% CAGR Over Last Three
Years; Expects ~$100M of Revenue in
CY 2024, with Adjusted EBITDA Margin Above 40%
- Significantly Expands Presence in the Fast-Growing,
High-Margin Electrical Grid End Market, Benefiting from
Infrastructure Upgrades, Capacity Expansion and Data Center
Demand
- Standex's Exposure to Fast Growth Markets Increases to ~25%
of Sales on Pro-Forma FY 2024 Basis
- Broadens Technology Platform and Capabilities to Expand
Growth into Electronics' Markets
- Geographic Expansion with Engineering Expertise in
India and Intellectual Property in
Low to Medium Voltage Technologies
SALEM,
N.H., Oct. 29, 2024 /PRNewswire/ -- Standex
International Corporation (NYSE: SXI) today announced that it
has acquired, in separate transactions, privately-held US-based
Amran Instrument Transformers and India-based Narayan Powertech Pvt. Ltd. (going
forward referred to as "Amran/Narayan Group") in cash and stock
transactions. These transactions represent a combined enterprise
value of approximately $462 million,
comprised of 85% cash and 15% in Standex common stock for Amran
Instrument Transformers and 90% cash and 10% in Standex common
stock for Narayan Powertech Pvt. Ltd. The 10% share exchange
related to Narayan Powertech Pvt. Ltd. is subject to India regulatory approval, which is expected
to take up to six months. The cash consideration of the
transactions was financed using cash-on-hand, existing credit
facilities, and a $250 million
364-day term loan with existing lenders. The Company intends over
the next several weeks to convert the 364-day term loan into
exercise of the accordion feature under its existing credit
facilities. Standex will remain committed to paying down debt
and expects to reduce leverage below 1.0x net debt to EBITDA ratio
within the first 24 months post-transaction.
With manufacturing locations in the
United States and India,
Amran/Narayan Group is a leading manufacturer of low voltage and
medium voltage instrument transformers. Its custom product
portfolio is specifically designed and developed in partnership
with OEMs for their specific equipment related to electrical grid
applications. Amran/Narayan Group's products have been installed in
over 50 countries around the world.
In calendar year 2024, Amran/Narayan Group estimates revenues of
approximately $100 million with an
adjusted EBITDA margin above 40%.
"As the largest acquisitions in the Company's history, this is
an exciting milestone for Standex," said David Dunbar, President and Chief Executive
Officer of Standex. "Amran/Narayan Group's extensive low to medium
voltage portfolio and engineering expertise fit within our strategy
to accelerate growth in secular, fast growth end markets. The
combination of Standex and Amran/Narayan Group continues Standex's
portfolio strategy of focusing our higher-margin business segments
in faster-growing markets. With these acquisitions, Standex
Electronics will now represent more than 50% of the Company, and we
anticipate consolidated adjusted EBITDA margin expanding by over
200 basis points in the first full year as a combined company. We
look forward to welcoming the entire Amran/Narayan Group team to
our company."
"Amran will operate as a key pillar of the combined companies'
low- to medium-voltage instrument transformers business," said
Bhargav Shah, Founder and President
of Amran. "Both Standex and Amran have a centralized focus on
long-term customer relationships and customer-specific new product
development, and together, we are optimistic about our combined
resources to accelerate growth in the electrical grid market."
"The combination of Narayan Powertech and Standex creates a
strong player in the transformer industry, with the ability to
leverage a larger global footprint and portfolio breadth to create
increased value for our customers," added Chirag Shah, Founder and Managing Director of
Narayan Powertech. "As part of the Narayan founding team, I
am thrilled to continue the journey with other key team members as
part of a global leader like Standex. We believe the combination
will allow for expanded growth opportunities, supported by a
seamless cultural fit."
Transaction Highlights
The transactions are expected to be immediately accretive to
Standex's revenue growth, EBITDA margin, operating margin, earnings
per share and free cash flow in the first full year post closing of
the transactions, excluding any acquisition and integration related
costs. Longer term, the combination is expected to create
cross-selling opportunities given the companies' complementary
offerings.
Moving forward, Amran/Narayan Group's founders and leadership
team will remain with the combined company. Their entrepreneurial
know-how, technical skills, and extensive experience across the
transformer industry will benefit the combined company with its
integration efforts, innovation roadmap, and future growth.
Amran/Narayan Group will be reported as part of Standex's
Electronics business segment.
Guggenheim Securities LLC is serving as financial advisor and
Foley Hoag LLP and Lexygen are serving as legal counsel to Standex.
Northern Edge Capital Advisors, LLC is serving as financial advisor
and Chamberlain, Hrdlicka, White, Williams & Aughtry, P.C., and
Khaitan & Co. are serving as legal counsel to Amran and
Narayan.
Conference Call Details
Standex will host a conference call for investors today,
October 29, 2024, at 10:00 a.m ET. On
the call, David Dunbar, President,
and CEO, and Ademir Sarcevic, CFO,
will review these acquisitions together with the Company's first
quarter financial results and business and operating highlights.
Investors interested in listening to the webcast and viewing the
slide presentation should log on to the "Investors" section of
Standex's website under the subheading, "Events and Presentations,"
located at www.standex.com.
A replay of the webcast will also be available on the Company's
website shortly after the conclusion of the presentation online
through October 29, 2025. To listen
to the teleconference playback, please dial in the U.S. (888)
660-6345 or (646) 517-4150 internationally; the passcode is 60631#.
The audio playback via phone will be available through November 5, 2024. The webcast replay can be
accessed in the "Investor Relations" section of the Company's
website, located at www.standex.com.
About Standex
Standex International Corporation is a global
multi-industry manufacturer in five broad business segments:
Electronics, Engraving, Scientific, Engineering Technologies, and
Specialty Solutions with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Brazil, Turkey, India, and China. For additional
information, visit the Company's website standex.com.
About Amran and Narayan
Amran Instrument Transformers and Narayan Powertech Pvt.
Ltd design and manufacture low voltage and medium voltage
instrument transformers for products focused on the electrical
grid, smart grid technology, data centers, and renewable energy
systems. For additional information, visit the Company's related
websites at amranit.com and narayanpowertech.com.
Forward-Looking Statements
Statements contained in this Press Release that are not based
on historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements may be identified by the
use of forward-looking terminology such as
"should," "could," "may," "will," "expect," "believe," "estimate," "anticipate," "intend," "continue,"
or similar terms or variations of those terms or the negative of
those terms. There are many factors that affect the
Company's business and the results of its operations and
that may cause the actual results of operations in future periods
to differ materially from those currently expected or
anticipated. These factors include, but are not limited
to: the impact of pandemics and other global crises or catastrophic
events on employees, our supply chain, and the demand for our
products and services around the world; materially adverse or
unanticipated legal judgments, fines, penalties or settlements;
conditions in the financial and banking markets, including
fluctuations in exchange rates and the inability to repatriate
foreign cash; domestic and international economic conditions,
including the impact, length and degree of economic downturns on
the customers and markets we serve and more specifically conditions
in the automotive, construction, aerospace, defense,
transportation, food service equipment, consumer appliance, energy,
oil and gas and general industrial markets; lower-cost competition;
the relative mix of products which impact margins and operating
efficiencies in certain of our businesses; the impact of higher raw
material and component costs, particularly steel, certain materials
used in electronics parts, petroleum based products, and
refrigeration components; the impact of higher transportation and
logistics costs, especially with respect to transportation of goods
from Asia; the impact of inflation
on the costs of providing our products and services; an inability
to realize the expected cost savings from restructuring activities
including effective completion of plant consolidations, cost
reduction efforts including procurement savings and productivity
enhancements, capital management improvements, strategic capital
expenditures, and the implementation of lean enterprise
manufacturing techniques; the potential for losses associated with
the exit from or divestiture of businesses that are no longer
strategic or no longer meet our growth and return expectations; the
inability to achieve the savings expected from global sourcing of
raw materials and diversification efforts in emerging markets; the
impact on cost structure and on economic conditions as a result of
actual and threatened increases in trade tariffs; the inability to
attain expected benefits from acquisitions and the inability to
effectively consummate and integrate such acquisitions and achieve
synergies envisioned by the Company; increased costs from
acquisitions to improve and coordinate managerial, operational,
financial, and administrative systems, including internal controls
over financial reporting and compliance with the
Sarbanes-Oxley Act of 2002, and other costs related to such systems
in connection with acquired businesses; market acceptance of our
products; our ability to design, introduce and sell new products
and related product components; the ability to redesign certain of
our products to continue meeting evolving regulatory requirements;
the impact of delays initiated by our customers; our ability to
increase manufacturing production to meet demand including as a
result of labor shortages; the impact on our operations of any
successful cybersecurity attacks; and potential changes to future
pension funding requirements. For a more comprehensive discussion
of these and other factors, see the "Risk Factors" section of the
Company's most recent annual report on Form 10-K filed with the SEC
and available on the Company's website. In addition, any
forward-looking statements represent management's estimates only as
of the day made and should not be relied upon as representing
management's estimates as of any subsequent date. While the Company
may elect to update forward-looking statements at some point in the
future, the Company and management specifically disclaim any
obligation to do so, even if management's estimates change.
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SOURCE Standex International Corporation