- Deal represents a 35% premium
- Offer includes a share element
- Firms cite ‘strong commercial logic’
Building products group Tyman (TYMN) is the latest UK mid-cap to attract a trade buyer with US firm Quanex (NX:NYSE) offering 400p per share for the business in a mix of cash and stock.
Tyman shares jumped 29% to 381p although volumes were fairly light compared with previous days.
SUBSTANTIAL SHARE-BASED ELEMENT
Texas-based Quanex makes window and door screens, glass spacers and kitchen and bathroom components, so there is a commercial logic to tying up with Tyman, and the board of the UK company has recommended the deal.
The US firm is offering a 60/40 cash and shares deal as well as an all-share deal, both of which value Tyman’s equity at £788 million or 400p per share.
That equates to a 35% premium to Friday’s (19 April) closing price, although it is still 20% below where Tyman shares were trading at their peak in 2021 when the lockdown-driven market for RMI (repair, maintenance and improvement) was in full flow.
Depending on how many investors take up which offer from Quanex, Tyman shareholders will end up with between 30% and 32% of the enlarged company in US dollar-denominated shares.
‘COMPELLING’ LOGIC
Both Tyman and Quanex describe the deal as ‘transformational’, which is appropriate given the US firm has a market cap of just over $1.1 billion and is offering the equivalent of just under $1 billion for the UK business.
Nicky Hartery, non-executive chair of Tyman, said the deal marked ‘the beginning of an exciting next chapter’ and would ‘strengthen the enlarged business for the benefit of all our customers, employees and other stakeholders’.
Quanex chairman, president and CEO George L. Wilson said: ‘The industrial logic and strategic rationale of bringing Quanex and Tyman together are clear and compelling. As one company, we will have an enhanced financial profile grounded in attractive margins, strong free cash flow and a healthy balance sheet, that will enable us to invest in organic and inorganic growth opportunities to deliver superior returns for investors.’
The deal already has the backing of Tyman’s largest shareholder, Teleios Capital Partners, which owns 16.4% of the capital.
Benjamin Schmid, investment director at Teleios Capital Partners, commented: ‘As a longstanding shareholder of Tyman, Teleios supports Quanex’s proposal, which will create a stronger, combined platform of scale, with significant potential to both consolidate and establish leadership positions in existing and adjacent markets.’
