Quanex to acquire Tyman in $1.1B transaction

Quanex announced it has reached agreement with Tyman on the terms of a recommended cash and share offer, under which Quanex will acquire the entire issued and to be issued share capital of Tyman for approximately $1.1B in enterprise value. Quanex’s acquisition of Tyman creates a solutions provider in the building products industry, which on a pro forma basis generated approximately $2B of revenue in the fiscal year ended October 31, 2023. The acquisition will result in significant recurring pre-tax cost synergies of approximately $30M on an annual run-rate basis which are expected to be achieved within two years after transaction close. Under the terms of the acquisition, Tyman shareholders will be entitled to receive an implied value of 400.0 pence for each Tyman share, based on Quanex’s last closing share price of $34.64 on April 19. Tyman shareholders will have the option to elect to receive the consideration as either a mix of 240.0 pence in cash and 0.05715 shares of Quanex common stock for each Tyman share, or as a capped all-share alternative of 0.14288 shares of Quanex common stock per Tyman share. The capped all-share alternative will be subject to proration if more than 25% of the outstanding Tyman shares elect to receive this alternative. Upon close of the acquisition, Tyman shareholders will own between approximately 30% and 32% of Quanex, depending on shareholder elections, on a fully diluted basis. Based on Quanex’s last closing share price of $34.64 on April 19, the consideration represents: a premium of approximately 35.1% to the closing price of the Tyman shares of 296.0 pence on the London Stock Exchange on April 19; a premium of approximately 36% to the one-month volume weighted average price of 294.2 pence per Tyman Share; and a premium of approximately 40.5% to the six-month volume weighted average price of 284.8 pence per Tyman Share. Tyman shareholders will also be entitled to receive the final dividend of 9.5 pence per Tyman share, as declared by Tyman on March 7. The acquisition is not subject to any financing contingency, with Quanex having attained fully committed financing from Wells Fargo Bank, N.A., Bank of America Securities and TD Bank. The full terms and conditions of the acquisition are set out in a joint announcement released by Quanex and Tyman in the UK under Rule 2.7 of the Takeover Code.