Leggett & Platt earned $300 million, along with a subordinated note and preferred stock, from the sale of its aluminum diecasting operations. It said most of the revenue from the sale would be used to repurchase stock.
The buyer is Kenner & Co. and a team of company managers. Kenner is a holding company that sold the 19 operations known as Pace Industries to Leggett & Platt in 1996.
The Pace organization will remain headquartered in Fayetteville, AR. It has plants in Alabama, Arkansas, Massachusetts, Minnesota, Missouri, New Hampshire, Pennsylvania, Wisconsin, as well as two in Mexico.
With 14 diecasting plants, four tool-and-die shops, and two finishing and painting facilities, Leggett’s aluminum products unit was the largest marked for sale. It manufactures non-automotive diecastings for customers that produce motorcycles, small engines, electric motors, outdoor lighting, appliances, gas barbecue grills, power tools, consumer electronics, and telecommunications devices.
Some of the operations produce magnesium and zinc diecasting, as well.
Last November, Leggett reported it would sell off its aluminum operations along with six other business units, in a new organizational strategy of increasing its return on assets, raising the amount of cash it returns to shareholders, and maintaining disciplined growth.
The six other units are still available for sale.
Leggett is a Fortune 500 manufacturing company that produces a diverse range of products, including steel bed springs, retail store fixtures, office furniture components, automotive seat support and lumbar systems, and a variety of other products.
President and CEO David S. Haffner stated: “From an overall perspective, we have now received 75% of the $400 million of after-tax cash proceeds we originally anticipated from the divestiture of our seven targeted business units. While cognizant of the ongoing difficult market environment for M&A transactions, we are diligently proceeding with, and optimistic about, the disposition of our six remaining business units during 2008."