Mattr signs agreement to sell part of its pipeline to Tenaris for approximately CAD $220M
by CM Staff
The perimeter of the transaction does not include entities of the PPG business in Malaysia, Italy, the United Kingdom and Brazil, which the Company remains committed to exit at the appropriate time.
TORONTO — Shawcor Ltd., dba Mattr Infratech announced on Aug. 14, that it has entered into a definitive agreement to sell a substantial part of its pipe coating division to Tenaris S.A., including its wholly owned operations in Canada, the US, Mexico, Norway, the UAE and Indonesia, several mobile concrete coating plants, its joint-venture interest in Azerbaijan, its research and development capabilities in Toronto and Norway, and a broad portfolio of intellectual property.
The transaction will involve a mixture of legal entity and asset sales, and is subject to customary closing conditions, including regulatory approvals, which the Company currently anticipates will be completed within approximately six months. The company will retain all earnings from the business until the transaction closes, and upon closing, the Company expects to receive gross sale proceeds of approximately $166 million USD, or approximately $220 million CAD at current exchange rates, on a cash-free, debt-free basis, subject to normal working capital adjustments.
The perimeter of the transaction does not include entities of the PPG business in Malaysia, Italy, the United Kingdom and Brazil, which the Company remains committed to exit at the appropriate time.
“Once complete, the transaction announced today, combined with the previously completed sale of PPG’s Socotherm Argentina and UK specialty coating businesses, and a few remaining non-material actions, will conclude our strategic review process,” said Mike Reeves, Mattr’s President and CEO.
“Aligned with the Company’s actions over the last two and half years to simplify its portfolio, lower its volatility and increase its full-cycle margins, this announcement positions Mattr to accelerate its pursuit of focused, high-return growth in our remaining core businesses. While it will take several months to complete the pending transaction, I would like to take this opportunity to thank every member of the PPG team for their many contributions to the history and success of our organization.”
Effective August 15, 2023, the PPS segment, except those entities excluded from the transaction, will be accounted as held for sale and financial reporting will transition to discontinued operations. The Company currently allocates approximately $8 million CAD of its annual corporate costs to the PPS segment. Upon transition of a substantial portion of the segment to discontinued operations, these costs will instead be reflected within the Company’s corporate division and, upon completion of the transaction, will be partially offset by income tied to a transition services agreement. The Company is committed to lowering these costs over time.
