Standex International Corporation (NYSE: SXI) today announced that it has entered into a definitive agreement to sell the Refrigerated Solutions Group (RSG), part of the Food Service Equipment segment, to Ten Oaks Group, a family office focused exclusively on corporate divestitures, for $11 million in cash. In fiscal 2019, RSG reported approximately $150 million in revenue and about a $1 million operating loss. Standex expects to incur approximately $27 million in non-cash charges associated with the divestiture including goodwill impairment in the fiscal third quarter of 2020. The transaction is expected to close in the calendar second quarter of 2020 and is subject to customary closing conditions.
"With today's announced sale of RSG, we continue the simplification of our portfolio that began with the divestiture of the Cooking business in early 2019. This step enables us to focus more clearly on those of our businesses which have higher growth and margin profiles. These strategic businesses win in the marketplace by partnering with customers to solve their application needs with differentiated custom solutions," commented President and Chief Executive Officer David Dunbar.
"As a result, we expect the remainder of our business to exhibit a stronger financial profile. Pro forma for the RSG sale, consolidated EBITDA margin for our 2019 fiscal year would have been approximately 300 basis points higher. In addition, we expect the sale to have immaterial impact on earnings per share for the remainder of our 2020 fiscal year.
"Going forward, we will continue to utilize our strong balance sheet and invest our management and financial resources to drive profitable growth in these core businesses through execution on an active pipeline of both organic and inorganic opportunities," concluded Dunbar.
RSG manufactures refrigerated cabinets and walk-ins for customers food service and retail end market. The segment's NorLake® and Master-Bilt® brands are operated from facilities in New Albany, MS and Hudson, WI.
About Standex
Standex International Corporation is a multi-industry manufacturer in five broad business segments: Engraving, Electronics, Engineering Technologies, Hydraulics, and Food Service Equipment with operations in the United States, Europe, Canada, Japan, Singapore, Mexico, Brazil, Turkey, South Africa, India and China. For additional information, visit the Company's website at http://standex.com/.
