Melrose Industries Plc, a London-based acquisition company, announced that it has signed a conditional agreement for the sale of Truth Hardware to Tyman Plc for a total consideration of $200 million, or 129 million pounds, payable in cash on completion. Tyman Plc, also based in London, owns Amesbury, a North American hardware supplier.
Tyman officials described the pending acquisition as “a strategic opportunity to enhance the [hardware] Group’s position in the North American door and window components market where Tyman sees significant opportunity for continued growth.”
Company officials also noted that Truth Hardware provides an “excellent strategic fit” with Amesbury Group’s North American division. In particular, the acquisition will give the Group: an expanded and highly complementary product portfolio especially in casement hardware categories; an enlarged and strategically positioned manufacturing footprint, including a facility in Canada; and the potential for a meaningful market share in Canada, according to Tyman.
“The Board believes that overall, the acquisition of Truth Hardware will significantly strengthen the Group’s existing business model and underpin its growth objectives,” reads the statement.
“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,” adds Louis Eperjesi, Tyman chief executive. “We look forward to welcoming Truth Hardware employees into our organization to expand our existing positions across North America and beyond.”
For the full-year 2012, Truth recorded sales of $126.0 million, operating profit of $18.6 million and EBITDA of $22.5 million, according to Melrose.
“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,” reads a statement from Melrose. “Tyman is well-positioned to add further value to the business and we wish them and Truth all future success.”
The consideration is on a debt- and cash-free basis. Melrose, which has owned Truth since June 2008, said it intends to use the proceeds to pay down existing borrowings. Completion of the deal is expected to occur in June 2013.