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Mueller Water Products sells U.S. Pipe

Keywords: Tags  Mueller Water Products, U.S. Pipe, Wynnchurch Capital, acquisitions, Accuride, Fabco, Advanced Materials, Michael Cowden

TORONTO — Mueller Water Products Inc. has sold its U.S. Pipe & Foundry Co. LLC and Fast Fabrications LLC businesses to private equity firm Wynnchurch Capital Ltd.

Wynnchurch acquired the assets for $89.8 million in cash plus $4.2 million for estimated net working capital and other expenses, Wynnchurch and Mueller said in a joint statement. Chicago-based Wynnchurch also has agreed to reimburse Mueller for an estimated $10.2 million in liabilities.

Atlanta-based Mueller said it plans to use the proceeds from the deal to pay down debt and for general corporate expenses.

The water infrastructure company said last year that it might look to sell U.S. Pipe, citing losses at the Birmingham, Ala.-based manufacturer of ductile iron pipe used primarily for water transmission (AMM, May 4).

Mueller likely will still record a loss on the divestiture when its financial results are released for the quarter ended March 31, the company said in a U.S. Securities Exchange Commission (SEC) filing.

That loss likely will be $115.3 million, according to an unaudited condensed consolidated pro-forma balance sheet attached to the SEC filing. Proceeds from the sale probably will be offset by U.S. Pipe liabilities and a tax loss resulting from the divestiture of the business, the SEC filing suggested.

Wynnchurch has made several forays recently into metals-related businesses. The private equity firm last year acquired Accuride Corp. subsidiary Fabco Automotive Corp., a Livermore, Calif.-based manufacturer of engineered, specialty gearbox, axle and transfer case products for all-wheel-drive, medium-duty and heavy-duty vehicles used in severe service applications (AMM, Oct. 7).

Wynnchurch also acquired Dearborn, Mich.-based Wolverine Advanced Materials LLC, another automotive-related company, in late 2010.

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