Summary
TE Connectivity plc (TEL) announced on September 17, 2018, the execution of a definitive agreement to sell its Subsea Communications business unit to Crown Subsea AcquisitionCo LLC for $325 million in cash. This divestiture is a significant strategic move, allowing the company to streamline its operations and focus on core areas. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to be completed by December 31, 2018. The sale includes potential for contingent consideration, offering TE Connectivity a share in future upside if the buyer resells the business within 24 months of closing. This sale represents a focused effort by TE Connectivity to optimize its portfolio. The proceeds from this transaction will likely strengthen the company's financial position and provide flexibility for future investments or capital allocation. Investors should monitor the closing process and the company's subsequent strategic initiatives as it continues to refine its business mix.
Key Highlights
- 1TE Connectivity plc (TEL) to sell its Subsea Communications business unit for $325 million in cash.
- 2The sale agreement was entered into on September 16, 2018, with Crown Subsea AcquisitionCo LLC.
- 3The transaction is subject to customary closing conditions, including regulatory approvals.
- 4A potential termination fee of $22,750,000 is payable by the purchaser under specific financing default scenarios.
- 5TE Connectivity will receive contingent consideration of 20% of net proceeds if the buyer resells the business within 24 months of closing.
- 6The company has entered into a Credit Support Agreement to provide transitional credit support for the divested business.
- 7The sale is expected to close by December 31, 2018.