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
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,
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