Feb 23 2011
Worthington Industries, Inc. (NYSE: WOR) announced today that it has reached an agreement in principle with Marubeni-Itochu Steel America Inc. (MISA) to combine Dietrich Metal Framing and ClarkWestern Building Systems in a newly-formed joint venture.
In the transaction, MISA will acquire a 75% interest of the joint venture, and Worthington will acquire a 25% interest. As part of the exchange, Worthington will also acquire the assets of the non-automotive service center business of MISA Metals, Inc. (MMI) consisting of three steel processing facilities located in Ohio and Tennessee. Both parties anticipate the deal will be signed by the end of the month.
“We are making two businesses stronger by combining them in a joint venture,” John McConnell, Chairman and CEO of Worthington Industries said. “The economic downturn has been particularly difficult for the construction industry and by creating the joint venture, we best position them to be profitable now, and for success when the market begins to recover.” McConnell added, “We are also pleased that a large number of our current employees will have an opportunity to work for the joint venture.”
“The joint venture will provide our customers access to a broad product line, high-performing equipment and excellent customer service,” said Bill Courtney, President of ClarkWestern Building Systems Inc. “Our combined technical expertise has the potential to benefit our customers through improved efficiency, innovative products and strong leadership. We are excited about the opportunities we can offer by having a broad distribution capability supported by our combined well-respected workforce.”
The exchange of assets is being structured as a cashless transaction with the exception of working capital adjustments and other transition payments. The metal framing joint venture will be led by the ClarkWestern Building Systems' leadership team and will combine the best of Dietrich and ClarkWestern Building Systems. Consolidation decisions will focus on maximizing geographic coverage and customer service while achieving low cost production. The joint venture anticipates operating 13 manufacturing facilities across the country, providing the industry’s broadest line of metal framing studs and accessories. Seven of Dietrich’s 13 facilities will be retained by Worthington and permanently closed following a brief transition period. One ClarkWestern Building Systems facility will also be closed.
The Dietrich facilities anticipated to be closed include: Colton and Stockton, Calif.; Denver, Colo.; Hammond, Ind.; Baltimore, Md.; Boonton, N.J.; and Hutchins, Texas. Dietrich facilities that will remain open include: McDonough, Ga.; Kapolei, Hawaii; Lenexa, Kan.; two Warren, Ohio facilities; and Baytown, Texas.
The MMI acquisition will provide Worthington Steel with new equipment and process tons as well as a Tennessee location to serve the important Southern region. Worthington anticipates closing the majority of Middletown, Ohio and the Lawrenceburg, Tenn. facilities and moving selected equipment to existing facilities. MMI’s Vonore, Tenn. location will become a Worthington Steel location.