Melrose disposes of hardware manufacturer in £129m deal
MIDLAND-based engineering turnaround specialist Melrose Industries has agreed to dispose of one of the firm’s in its portfolio in a deal worth £129m.
Truth Hardware, a leading designer and manufacturer of quality operating hardware in North America, has been sold to Tyman plc.
The deal is for a total consideration of $200m (£129m), which is payable in cash on completion of the deal, likely to be next month.
For the year ended December 31, 2012, Truth recorded sales of $126m, with an operating profit of $18.6m and EBITDA of $22.5m.
Melrose said it intended to use the proceeds of the deal to pay down existing borrowings. The disposal is conditional upon Tyman’s placing and open offer in connection with its equity fundraising becoming effective and anti-trust clearance in the US.
Simon Peckham, Chief Executive of Alcester-based Melrose, said: “We are very pleased with the progress Truth has made since our acquisition of FKI Plc in 2008 and we believe it is now well placed for the future. As planned at acquisition, we are disposing of Truth at the early stages of what appears to be a recovery in the United States housing market.
“Tyman is well positioned to add further value to the business and we wish them and Truth all future success.”
Melrose is being advised on the disposal by Robert W. Baird & Co.
Truth sells its products directly to the manufacturers of residential and light commercial windows and doors. It operates from facilities in Owatonna, MN and Brampton, Canada.
Louis Eperjesi, Chief Executive of Tyman, commented: “The acquisition is fully in-line with Tyman’s stated strategy of growth and represents a strategic opportunity to further develop our business in North America.
“The acquisition adds a complementary product portfolio to Tyman’s existing offering in North America, a well-invested manufacturing base, a trusted brand and a meaningful presence in the Canadian market. Truth Hardware brings established customer relationships and product capabilities that together with our existing business create a platform of scale well-positioned to benefit from future market growth.
“We look forward to welcoming Truth Hardware employees into our organisation to expand our existing positions across North America and beyond.”
