Rexnord board may ponder sale of company

Milwaukee-based Rexnord Corp. announced that its board of directors has initiated a review of its strategic alternatives that could include the sale of the company.

The company said its board has hired Goldman, Sachs & Co. to serve as its financial adviser to evaluate alternatives to “enhance shareholder value.”

“The alternatives considered could include the possible sale of the company, the possible sale of one or both of its business platforms or the maintenance of the current structure and execution of the existing business strategy,” Rexnord stated.

The company said it can offer no assurance that it will enter into any transaction in the future, and no decision has been made to enter into a transaction at this time. The company does not intend to disclose further developments unless and until such time as its board of directors has approved a specific course of action, or it otherwise deems further disclosure is appropriate or required.

Rexnord’s stock is traded on the New York Stock Exchange with the ticker symbol “RXN.” The company became publicly traded with an initial public offering last April.

Also, Rexnord today reported fiscal third quarter net income of $9.2 million, or 9 cents per share, up from $5.6 million, or 8 cents per share, in the same period a year ago.

The company’s quarterly sales dipped to $471.7 million from $485.9 million a year earlier.

Todd Adams, president and chief executive officer, said, “Despite a challenging macro-economic environment, we delivered strong year-over-year margin expansion and free cash flow while continuing to reinvest in our businesses. Solid execution and productivity gains across both platforms allowed us to expand our adjusted EBITDA margin by 110 basis points.”

Looking forward, Adams said, “Looking ahead to our fourth quarter, we anticipate sales to be in the range of $535 million to $555 million (+1 percent core growth at the mid-point) and adjusted EBITDA to be in the range of $110 million to $120 million resulting in fiscal 2013 sales in the range of $2 billion to $2.020 billion and fiscal 2013 adjusted EBITDA in the range of $400 million to $410 million. Our outlook excludes the impact of any future acquisitions or divestiture transactions, non-cash actuarial pension gains or losses, future restructuring actions or future other non-recurring costs, including any potential costs associated with the board of directors review of strategic alternatives that was disclosed on an 8-K today.”

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