FBM selling mechanical insulation business
Foundation Building Materials, Inc. (FBM) is selling its mechanical insulation business to Dunes Point Capital, LP, for $122.5 million.
The deal is expected to close in the fourth quarter of 2018, FBM said.
The company’s mechanical insulation segment distributes and fabricates commercial and industrial insulation products through 67 branch and fabrication locations in the United States and Canada that provide solutions for pipes and mechanical systems to insulation contractors, HVAC contractors, and general contractors and operators of large industrial facilities.
In addition, the segment provides insulation fabrication services that customize products to fit specific systems for commercial and industrial customers.
Based in Tustin, Calif., FBM distributes wallboard, suspended ceiling systems, along with mechanical insulation, through 220 branches across the United States and Canada.
Net proceeds of approximately $116 million from the transaction will be used to pay down FBM’s ABL credit facility. FBM recently completed the refinancing of its long-term debt and expects $12 million to $15 million of annual cash interest expense savings beginning in the fourth quarter of 2018.
With the completion of these two transactions, FBM said it will have “ample liquidity” to pursue its growth initiatives while continuing its focus of reducing debt.
“The divestiture of the mechanical insulation segment will sharpen FBM’s focus on growing our more profitable businesses while driving superior service and productivity for our customers,” said Ruben Mendoza, FBM president and CEO. “Today’s announcement advances our strategy of reducing debt, improving profitability, and optimizing FBM’s portfolio and positions FBM to enhance shareholder value.”
Once the sale is complete, FBM will operate a single segment – specialty building products.
For 2018, the FBM expects full year 2018 specialty building product segment net sales to reach between $1.98 billion and $2.06 billion. This includes net sales contributions from acquisitions to date.
The deal is expected to close in the fourth quarter of 2018, FBM said.
The company’s mechanical insulation segment distributes and fabricates commercial and industrial insulation products through 67 branch and fabrication locations in the United States and Canada that provide solutions for pipes and mechanical systems to insulation contractors, HVAC contractors, and general contractors and operators of large industrial facilities.
In addition, the segment provides insulation fabrication services that customize products to fit specific systems for commercial and industrial customers.
Based in Tustin, Calif., FBM distributes wallboard, suspended ceiling systems, along with mechanical insulation, through 220 branches across the United States and Canada.
Net proceeds of approximately $116 million from the transaction will be used to pay down FBM’s ABL credit facility. FBM recently completed the refinancing of its long-term debt and expects $12 million to $15 million of annual cash interest expense savings beginning in the fourth quarter of 2018.
With the completion of these two transactions, FBM said it will have “ample liquidity” to pursue its growth initiatives while continuing its focus of reducing debt.
“The divestiture of the mechanical insulation segment will sharpen FBM’s focus on growing our more profitable businesses while driving superior service and productivity for our customers,” said Ruben Mendoza, FBM president and CEO. “Today’s announcement advances our strategy of reducing debt, improving profitability, and optimizing FBM’s portfolio and positions FBM to enhance shareholder value.”
Once the sale is complete, FBM will operate a single segment – specialty building products.
For 2018, the FBM expects full year 2018 specialty building product segment net sales to reach between $1.98 billion and $2.06 billion. This includes net sales contributions from acquisitions to date.