By Lisa Kerner
Charlotte, N.C., Nov. 19 - Quanex Corp. said it will separate its building products and vehicular products businesses in two separate transactions.
The company's board of directors approved the measure following a review of strategic alternatives for Quanex first announced in May.
The building products business will be spun off to shareholders as a stand-alone company called Quanex Building Products in a taxable distribution. Quanex shareholders of record will receive one share of Quanex Building Products stock for each share of Quanex stock.
Quanex will merge its vehicular products business, including its Macsteel division, with a wholly owned subsidiary of Gerdau SA for $39.20 cash per share. The deal, which requires shareholder approval, values the vehicular products' business at about $1.673 billion.
"As we have said previously, our vehicular products and building products businesses have different capital costs, processes, products and end markets, and we have concluded that these businesses will be better positioned for success as separate companies," chairman and chief executive officer Raymond A. Jean said in a company news release.
Both transactions are expected to close in the first quarter of 2008. Until then, Quanex plans to continue paying a regular, quarterly cash dividend.
Quanex was advised by Lazard Freres & Co. LLC and Fulbright & Jaworski LLP.
Houston-based Quanex manufactures components for the vehicle and building products industries.
| Acquirer: | Gerdau SA
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| Target: | Quanex Corp.
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| Announcement date: | Nov. 19
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| Transaction total: | $1.673 billion
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| Price per share: | $39.20
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| Expected closing: | First quarter of 2008
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| Stock price of target: | NYSE: NX: $36.74 on Nov. 16
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