Quanex Building Products Corporation has announced its acquisition of Tyman PLC for approximately $1.1 billion in enterprise value. The acquisition is expected to significantly enhance the scale and global reach of Quanex, positioning the combined company for profitable growth and value creation.
On a pro forma basis, the combined company generated approximately $2 billion in revenue in the fiscal year ended October 31, 2023. The acquisition is anticipated to deliver approximately $30 million in annual run-rate cost synergies.
The acquisition is expected to be meaningfully accretive to earnings in the first full fiscal year following the completion of the acquisition, taking into account cost synergies. Quanex anticipates achieving net leverage of approximately 1.5x in the medium-term following the completion of the acquisition.
Under the terms of the acquisition, Tyman shareholders will be entitled to receive an implied value of 400.0 pence for each Tyman share, representing a premium of approximately 35.1% to the closing price of Tyman shares on the London Stock Exchange on April 19, 2024.
The acquisition has been unanimously approved by the boards of directors of both Quanex and Tyman and is expected to close in the second half of calendar year 2024, subject to the satisfaction of customary closing conditions, including shareholder approval from both Tyman and Quanex shareholders and regulatory approvals.
Following the closing of the acquisition, the combined company’s headquarters will be located at Quanex’s current head office in Houston, Texas. The combined company will be led by Mr. George Wilson and the Quanex executive team.
Quanex was advised by UBS Investment Bank as the sole financial advisor. Foley & Lardner LLP and Travers Smith LLP served as legal advisors to Quanex.
Quanex will host a conference call today at 8:30 a.m. ET / 7:30 a.m. CT / 1:30 p.m. BST to discuss this transaction. A link to the live audio webcast will be available on Quanex’s website.
The acquisition is not subject to any financing contingency, with Quanex having attained fully committed financing from Wells Fargo Bank, N.A., Bank of America Securities, and TD Bank.
Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets, while Tyman is a leading international supplier of engineered fenestration components and access solutions to the construction industry.
The acquisition is expected to result in significant recurring pre-tax cost synergies of approximately $30 million on an annual run-rate basis, with additional revenue synergy potential. As a result of these announcements, the company's shares have moved -2.9% on the market, and are now trading at a price of $33.63. If you want to know more, read the company's complete 8-K report here.
