US-based Quanex to purchase UK's Tyman in a $976 million cash and share deal

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US-based Quanex to purchase UK's Tyman in a $976 million cash and share deal

Team FS

22/Apr/2024

Key Points:

Quanex Building Products, based in the US, announces the acquisition of British doors and windows supplier Tyman in a cash and share deal valued at approximately $976 million.
The acquisition reflects a growing trend of companies leaving the London stock market, with Tyman joining the list as US housebuilders navigate challenges posed by high mortgage rates.
Under the terms of the deal, Tyman shareholders will receive cash and Quanex shares, with significant cost synergies expected to be realized in the coming years.

In a significant move within the building products industry, US-based Quanex Building Products has announced its acquisition of Tyman, a British supplier of doors and windows. The cash and share deal, valued at approximately $976 million, marks a strategic maneuver for Quanex as it seeks to strengthen its position in the global market. With Tyman's expertise and market presence, Quanex aims to enhance its product offerings and expand its reach to better serve customers worldwide.

Navigating Market Dynamics: US Housebuilders and High Mortgage Rates
The acquisition comes at a pivotal time for US housebuilders, who are grappling with challenges posed by high mortgage rates. In response, many are cutting prices and offering incentives to stimulate sales, particularly among first-time buyers. Against this backdrop, Quanex's move to acquire Tyman underscores the company's strategic vision and proactive approach to addressing market challenges. By expanding its portfolio through the acquisition of Tyman, Quanex aims to capitalize on emerging opportunities and position itself for long-term growth.

London Stock Market Exodus: Tyman Joins the Trend
Tyman's decision to accept Quanex's acquisition offer aligns with a broader trend of companies leaving the London stock market in favor of alternative listings. This trend gained momentum following Britain's biggest chip company ARM's floatation in New York last year, as well as the shift of building supplies firm CRH and plumbing equipment company Ferguson to the United States. Tyman's departure from the London Stock Exchange reflects evolving market dynamics and the increasing attractiveness of alternative listing destinations for companies seeking to maximize shareholder value and access broader capital markets.

Strategic Implications: Synergies and Diversification
Under the terms of the deal, Tyman shareholders stand to benefit from a combination of cash and Quanex shares, positioning them for potential gains as the two companies integrate their operations. Quanex anticipates significant cost synergies, totaling $30 million, to be fully realized by the second year following completion of the transaction. This strategic alignment is expected to create a more diversified supplier in the building products sector, enhancing Quanex's competitive position and unlocking value for shareholders.

Shareholder Support and Future Outlook
Both Quanex and Tyman directors have expressed unanimous support for the proposed deal, with Tyman's largest shareholder, Teleios Capital Partners, backing the acquisition. This strong shareholder endorsement underscores confidence in the strategic rationale and potential benefits of the transaction. Looking ahead, Quanex expects to navigate regulatory approvals and logistical considerations to finalize the acquisition later this year. Upon completion, Tyman will be delisted from the London Stock Exchange, with the combined group listed on the New York Stock Exchange, signaling a new chapter of growth and opportunity for Quanex and Tyman stakeholders alike.

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US-based Quanex to purchase UK's Tyman in a $976 million cash and share deal

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