Cable maker Belden Inc said it will sell its Thermax and Raydex cable businesses to diversified manufacturer Carlisle Cos Inc for about $265 million, including debt, as it looks to exit the aerospace and defense markets.
Belden, which also makes cables and networking products for the broadcast and consumer electronics industries, has been unable to remain competitive offering cables as a stand-alone product to the aerospace and defense markets, company spokesman Matt Tractenberg said.
Belden has been acquiring connector companies that complement its cable offerings in other markets, and was probably unable to find a suitable deal for the Thermax and Raydex businesses, Stifel Nicolaus & Company analyst Noelle Dilts said.
"Belden's strategy is that it is looking to sell total solutions - cables and connectors. They don't want to sell stand-alone cables," Dilts said.
Thermax and Raydex, which have combined annual sales of about $112 million, make hook-up, data and coaxial wires and cables for commercial aerospace, defense and industrial markets.
Belden, which has a market value of about $1.60 billion, said it would use the proceeds to help fund a $200 million buyback of its common stock.
Carlisle said it expects the acquisition to close by December 31 and add to earnings in 2013.
Belden's shares, which had gained about 6 percent in value so far this year, were up 5 percent at $38.33 in afternoon trade on the New York Stock Exchange. Carlisle's stock was up 1 percent at $56.68.
(Reporting by Tej Sapru and Sagarika Jaisinghani in Bangalore; Editing by Maju Samuel, Supriya Kurane)