Quanex to Separate Building Products and Vehicular Products Businesses
Houston-based Quanex Corp., which owns TruSeal Technologies, Mikron Industries and Homeshield, has announced that it will spin off its Building Products business to its shareholders as a stand-alone company called Quanex Building Products in a taxable distribution. All Quanex shareholders of record will receive one share of Quanex Building Products' stock for each share of Quanex stock.
In addition, Quanex, consisting principally of the Vehicular Products business, including its MACSTEEL division, and corporate accounts, has signed a definitive agreement to merge with a wholly owned subsidiary of Gerdau S.A. in exchange for $39.20 per share in cash. This merger will take place after the spin-off of the Building Products business has occurred.
Quanex Building Products, as the Building Products business will be known, will be 100-percent owned by Quanex shareholders and is expected to trade on the New York Stock Exchange. Raymond A. Jean will become chairman and chief executive officer of Quanex Building Products and the current senior leadership team of Quanex will join him.
"We spent considerable time evaluating strategic alternatives and have determined this is the best course of action, as the businesses will benefit from greater strategic focus and capital flexibility, offer exciting opportunities for employees, and deliver compelling value for shareholders,” Jean says. “Shareholders will realize significant value in cash through the merger of Quanex with Gerdau, and they will continue to participate in the growth prospects of Building Products through ongoing ownership in this business."
The merger of Quanex by Gerdau S.A. remains subject to approval by Quanex shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Exon-Florio Provision and other customary closing conditions. The transactions are expected to be completed by the end of the first quarter of calendar 2008.
TruSeal president Gus Coppola says he does not expect this to affect the company’s customers in any way.
“Let me assure you that customers will not see any change in their relationship with Truseal as we transition to the new structure,” Coppola says. “You can expect this to be a seamless process that ensures customers will continue to receive the same high-quality products and service that they have come to expect from us.”
He also notes that it is an exciting time in the company’s future.
“Looking ahead, we are very excited about what this change in structure means for Quanex Building Products,” he says. “As a company concentrating purely on the Building Products space, we will be even more focused on bringing customers new and value-added products and enhancing customer service levels. We will also have the financial strength to ensure that we can weather various market cycles and continue to grow our business in attractive ways within the residential construction and remodeling markets.”
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