"We are pleased with the anticipated sale of Coatings," stated James Marlen, Ameron's chairman, president and chief executive officer. "The exit from Coatings will allow us to redeploy resources to Ameron's three remaining consolidated businesses, where we have leadership positions. Ameron will remain a solid, focused company with enhanced growth opportunities in the infrastructure, water and energy sectors, through its fiberglass-composite pipe, water transmission and infrastructure products businesses and TAMCO, Ameron's 50 percent-owned venture, which is the largest manufacturer of steel rebar in California.
"Coatings no longer fits our strategic objectives. In recent years, the financial performance of Ameron's coatings business did not meet expectations, partly due to difficult conditions in global markets. Also, consolidations within the coatings industry provided larger companies with greater economies of scale and constrained Ameron's ability to grow."
Coatings had sales of $210 million in 2005.
Ameron will sell the worldwide coatings business, while retaining certain real properties currently used by Coatings. Ameron will receive $115 million, plus working capital adjustments, for the business acquired by PPG. Additionally, Ameron plans to sell the retained real properties in the next 12 to 18 months and expects to generate additional proceeds of $15 million, based on current estimates of market value. In May 2006, the company sold property in Brea, Calif., formerly used by Coatings, for $9.7 million. If the retained properties are sold as expected, Ameron's sale of the business and the sale of the properties, including Brea, should generate cash of approximately $140 million after taxes.