Tyman is the latest London listed company to be acquired by an overseas competitor after accepting an offer of £788million from an American rival.
Quanex Building Products, a FTSE 250 company that supplies parts for windows and doors, said it was best to offer Tyman shareholders a cash-and-shares deal. This would give them “a significant portion of their holdings in cash at a premium over the current share price” while also allowing them to participate in future growth of the enlarged Group.
Quanex, listed in New York, offers 400p per share. This includes 240p cash for each Tyman stock, which is a 35% premium over the share price of Tyman on Friday. Tyman shares have risen by 92p or 31 percent to 388p, their highest price since January 2022.
Quanex can be purchased by shareholders for 0.14288 shares.
Analysts at Jefferies think that Tyman’s investors will find the offer appealing, especially given the current market conditions. Peel Hunt analysts said that the proposal is not a “knockout” and that they wouldn’t be surprised if some shareholders held out for a higher offer.
Nicky Hartery said, “This transformational and complementary transaction is going to strengthen our enlarged business, which will benefit all of our customers, employees, and other stakeholders.”
Tyman has about 3,600 employees and 15 locations around the globe. More than half its sales are from North America. Tyman, like many of its competitors in the DIY and construction industry, has been affected by challenging trading conditions due to a weak housing sector. The company’s profits before tax for the year ended December 31st fell by 19% to £50million on revenues that were lower at £657.6million.
Quanex of Texas, with a market capitalization of over $1.15 billion dollars, stated that the acquisition of Tyman will create a more diverse supplier in the building product sector, especially across its portfolio of windows and doors in North America. The combined group will generate an estimated $2 billion in revenue with a higher profit margin.
Teleios Capital Partners will vote for the deal. This Swiss hedge fund, which is Tyman’s biggest shareholder, with 16.4% of its shares, has a 16.4% stake. The deal will “create a more powerful, combined platform”.
George L Wilson said that as one company we will have a strengthened financial profile based on attractive margins, a strong free cashflow and a balanced sheet. This will allow us to invest in both organic and inorganic opportunities for growth to deliver superior returns to investors.
Quanex stated that it planned to close Tyman’s London head office after the completion of the transaction but did not intend to close any manufacturing facilities.
Tyman is the newest company to fall victim to a bid by American companies to take over British firms. London’s stocks are considered undervalued in comparison to international peers. DS Smith and Spirent Communication, as well as Wincanton, are some of the companies that have been sold or are in play.