Griffon Corporation to Acquire ClosetMaid® and Explore Strategic Alternatives for Clopay Plastic Products
“We are proud to add ClosetMaid to our family of iconic brands including
The acquisition is expected to be financed through cash on hand,
availability on our revolving credit facility, and/or through committed
debt financing which is expected to be in the form of a senior notes
offering. The acquisition is subject to customary closing conditions and
is expected to close by the end of
Griffon and Emerson will make a joint election under Section 338(h)(10) of the Internal Revenue Code, permitting the transaction to be treated as an asset purchase for tax purposes. This election will generate a tax benefit with an estimated present value of $35 million for Griffon and its shareholders.
The acquisition of ClosetMaid will be immediately accretive to cash flow
and earnings. In the first full year of operations, Griffon expects
ClosetMaid to contribute
Separately, Griffon announced that after having received from qualified
parties unsolicited inquiries to acquire
“Clopay Plastics is a well-recognized, trusted provider of specialty plastic films. It has an 83-year legacy of innovation and technical leadership, a state-of-the-art manufacturing base with global reach, outstanding personnel, and long-term relationships with blue-chip customers,” said Mr. Kramer. “Given the unique aspects of the Clopay Plastics business, Griffon is evaluating approaches to increase long-term value for our shareholders while providing enhanced opportunities for growth and value creation for Clopay Plastics and its customers.”
Conference Call Information
The Company will hold a conference call
The call can be accessed by dialing 1-800-946-0706 (U.S. participants)
or 1-719-325-4786 (International participants). Callers should ask to be
connected to the
A replay of the call will be available starting on
“Safe Harbor” Statements under the Private Securities Litigation Reform
Act of 1995: All statements related to, among other things, income
(loss), earnings, cash flows, revenue, changes in operations, operating
improvements, industries in which Griffon operates and
Griffon is a diversified management and holding company that conducts business through wholly-owned subsidiaries. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities as well as in connection with divestitures. In order to further diversify, Griffon also seeks out, evaluates and, when appropriate, will acquire additional businesses that offer potentially attractive returns on capital.
Griffon currently conducts its operations through three reportable segments:
Home & Building Products consists of two companies,
The AMES Companies, Inc.(“AMES”) and Clopay Building Products Company, Inc.(“CBP”):
AMES, founded in 1774, is the leading U.S. manufacturer and a global provider of long-handled tools and landscaping products for homeowners and professionals.
CBP, since 1964, is a leading manufacturer and marketer of
residential and commercial garage doors and sells to professional
dealers and some of the largest home center retail chains in
Telephonics Corporation, founded in 1933, is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.
Clopay Plastic Products Company, Inc., incorporated in 1934, is a global leader in the development and production of embossed, laminated and printed specialty plastic films for hygienic, health-care and industrial products and sells to some of the world's largest consumer products companies.
For more information on Griffon and its operating subsidiaries, please see the Company’s website at www.griffon.com.
Griffon evaluates performance and allocates resources based on each segment's operating results before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead), restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable ("Segment adjusted EBITDA", a non-GAAP measure). Griffon believes this information is useful to investors for the same reason.
The following table provides a reconciliation of Revenue and Segment
adjusted EBITDA for PPC for the trailing twelve months ended
RECONCILIATION OF NON-GAAP MEASURES
|For the Year Ended||For the Nine Months Ended||Months Ended|
|September 30, 2016||June 30, 2017||June 30, 2016||June 30, 2017|
|Segment Operating Profit||$||20,313||$||19,628||$||13,569||$||26,372|
|Depreciation and amortization||23,866||20,024||17,685||26,205|
|Segment Adjusted EBITDA||$||50,079||$||39,652||$||37,154||$||52,577|
Brian G. Harris
SVP & Chief Financial Officer
Senior Vice President