Foundation Building Materials (FBM), a specialty distributor of wallboard, suspended ceiling systems and mechanical insulation, said early Thursday that it has entered into a definitive agreement to sell its Mechanical Insulation segment to an affiliate of Dunes Point Capital, LP, for $122.5 million, subject to customary closing conditions. The transaction is expected to close in Q4.
The company said that net proceeds of $116 million from the transaction will be used to pay down the company’s ABL credit facility. In addition to the anticipated reduction of the ABL credit facility, Foundation Building Materials recently completed the refinancing of its long-term debt and expects $12 million to $15 million of annual cash interest expense savings beginning in Q4. With the completion of these two transactions, the company believes it will have ample liquidity to pursue its growth initiatives while continuing its focus of reducing debt.
Upon closing of the transaction, the company will operate under one segment, Specialty Building Products. For 2018, the company expects full year 2018 Specialty Building Product segment net sales to be in the range of $1.98 billion to $2.06 billion, which includes net sales contributions from acquisitions to date.
Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.