UPDATE: Myers Industries Announces Closing of Sale of WEK Industries, Reports Segment-Reporting Realignment
Myers Industries, Inc. (NYSE: MYE) announced today that it has completed the sale of WEK Industries, Inc. to Industrial Opportunity Partners, owners of Toledo Molding and Die, Inc. for approximately $19.5 million. The sale of WEK Industries includes manufacturing facilities and offices located in Jefferson, Ohio and Reidsville, North Carolina. Additional terms of the agreement were not disclosed. Western Reserve Partners advised Myers Industries, Inc. in connection with this transaction.
WEK Industries has been a part of the Myers Industries' Engineered Products Segment and had annual net sales of approximately $36 million in 2013. The majority of WEK Industries sales are driven by custom blow molded plastic parts for the automotive industry.
Commenting on the announcement, John C. Orr, President and Chief Executive Officer said, “The transaction allows WEK Industries to become part of Industrial Opportunity Partners portfolio of custom businesses and better positions the business for growth. We want to wish all of the WEK Industries employees well and thank them for their contributions to Myers Industries.”
On June 2, 2014, Myers announced that it had entered into an agreement to buy Scepter Corporation and Scepter Manufacturing, LLC (Scepter). The proceeds from the sale of WEK, which was not part of Myers' core growth strategy, will be applied to the debt that will be incurred in the acquisition of Scepter, a leading manufacturer of molded plastic material handling products for the consumer, marine, military and industrial markets. The Scepter acquisition is expected to close in early July.
Orr added, “We are focused on streamlining our business portfolio by expanding our leadership position in our Material Handling Segment and maintaining our strong market position in our Distribution Segment.”
In light of this transaction and recent announcements regarding the agreement to purchase Scepter and the commencement of the sale of Myers' Lawn and Garden Segment, the Company also announced a reporting segment realignment to reduce the reportable segments from four to two. Starting with the second quarter Form 10Q and going forward, Myers will report its underlying earnings in two reportable segments: Material Handling and Distribution.
WEK Industries, which will be reported as discontinued operations in future filings, was previously part of the Engineered Products Segment. The remaining businesses within the Engineered Products Segment, Patch Rubber Company and Ameri-Kart Corp. have been realigned into the Company's Distribution Segment and Material Handling Segment, respectively, and therefore the Engineered Products Segment has been disbanded.
The new Material Handling Segment will consist of industry leading brands Buckhorn®, Inc., Akro-Mils®, Novel, Myers do Brazil, Jamco Products, Inc., Ameri-Kart®, and, after it is concluded, the recently announced acquisition Scepter.
The new Distribution Segment will consist of Myers® Tire Supply, Myers Tire Supply International, and Patch Rubber Company.
“Today's announcement of the segment realignment reflects our commitment to grow our returnable packaging, specialty molding, and storage and safety products within the Material Handling Segment,” said Orr. “It also presents the opportunity to grow our Distribution Segment through continued focus on providing the best products for tire repair and retread, and undervehicle repair in a global marketplace. With these changes Myers has increased its focus on growing shareholder value.”
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