The Firm is representing Melrose Industries PLC on its recently announced proposed acquisition of Nortek, Inc., a Delaware corporation with common stock trading on the NASDAQ Global Market. The acquisition, which will be implemented principally by a U.S. tender offer to Nortek stockholders, places an aggregate equity value on Nortek of $1.436 billion and an enterprise value of $2.81 billion. Melrose is funding the acquisition, related expenses and the repayment of part of the existing debt of Nortek through a fully underwritten U.K. equity rights issue to raise approximately £1.65 billion. The balance of the debt repayment will be funded through new debt of approximately $780 million. The transaction is subject to a window shop period and regulatory clearance in the U.S. and is expected to close in late August 2016.

Melrose’s strategy is to purchase good manufacturing businesses with strong fundamentals whose performance can be improved. Melrose finances its acquisitions using a low level of leverage, improves the businesses by a mixture of investment and changed management focus, sells them and returns the proceeds to shareholders. Melrose has created over £2.8 billion of shareholder value since its formation in 2003.

Nortek is a leading diversified global manufacturer of innovative air management, security, home automation and ergonomic and productivity solutions.

The Simpson Thacher team includes Adam Signy, Clare Gaskell, Lucy Gillett and Rebecca Jack (U.K. Corporate); Eric Swedenburg, Stephen Wiseman, Jihyun Chung, Leah Nudelman and Spencer Sloan (U.S. Corporate); Nicholas Shaw, Till Lefranc and Pelin Demirdere (U.S. Securities); Sinead O’Shea, Dee Afolami and Max Rigden (U.K. Credit); David Vann, Michael Naughton, Kenneth Ehrhard, Etienne Renaudeau and Nicholas Barker (Antitrust); Joyce Y. Xu (Derivatives); Gregory Grogan, Patricia Adams and Caitlin Lucey (ECEB); Adeeb Fadil and Louise Kruger (Environmental); Linda Nyberg (IP); and Michael Badain (Tax).