Houston-based Quanex Building Products Corp. will acquire London-based Tyman plc for about $1.1 billion to reach global scale with an expanded offering of engineered components for the fenestration and other markets
The deal is a cash-and-share offer based on Quanex's last closing share price of $34.64 on April 19, 2024.
Quanex will be issued share capital of Tyman for about $1.1 billion in enterprise value.
Founded in 1993, Tyman offers hardware and sealing products for doors and windows as well as products for roof, wall and floor access in residential and commercial buildings. The company operates with regional divisions in North America and Europe.
The acquisition aligns with Quanex's strategy to add products and markets that move it closer to a $2 billion sales target, a news release says.
Quanex ranks No. 20 among North American pipe, profile and tubing extruders with annual related sales of about $340 million, according to Plastics News' latest ranking.
Quanex says it is the largest U.S. manufacturer and supplier of components to window and cabinet OEMs with vinyl extrusions going to the top five manufacturers.
The Tyman deal gives Quanex a wider customer base, more commercial products, and seals and extrusions for residential and commercial uses.
"This transformative acquisition accelerates our journey to becoming bigger, creating a leading supplier of building products with a more diverse geographic footprint, product offering and customer base," Quanex Chairman, President and CEO George Wilson said.
"With significantly enhanced scale, we are looking forward to fully optimizing our portfolio of products and assets to position Quanex as a comprehensive solutions provider for our customers. Importantly, we expect employees of both companies to also benefit from increased opportunities as part of a larger organization with expanded engineering, design and manufacturing capabilities."
There are no plans to close any of Tyman's manufacturing facilities.
The combined company headquarters will be at Quanex's current office in Texas. Wilson and the Quanex executive team will lead the business.
The combined business will have attractive margins, strong free cash flow and a healthy balance sheet to invest in organic and inorganic growth opportunities, Wilson said.
"The industrial logic and strategic rationale of bringing Quanex and Tyman together are clear and compelling, and we are confident in our ability to drive meaningful value creation for both Quanex and Tyman shareholders and enhanced market offerings for our customer base," Wilson said.
Tyman Chairman Nicky Hartery called the deal transformative and complementary and said it will strengthen the business.
"In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximizing value for Tyman shareholders, who will be able to realize a meaningful portion of their holding in cash at a significant premium to the prevailing share price while also participating in the future upside of the enlarged group," Hartery said.
The acquisition will result in pretax cost synergies of about $30 million on an annual run-rate basis, which are expected to be achieved within two years after the transaction closes.