Abi Jose Koilparambil
(Reuters) – U.S. company Quanex (NYSE:) Building Products will buy door and window supplier Tyman for cash and stock, valuing the British firm at about 788 million pounds ($976 million), the companies said on Monday.
Tyman shares were trading 30% higher as of 0844 GMT.
The acquisition comes as U.S. homebuilders are cutting prices and offering incentives to boost sales as high mortgage rates deter many first-time buyers.
Tyman joins a growing list of companies leaving the London Stock Exchange after major British chipmaker ARM floated in New York last year and building materials firm CRH (NYSE:) and plumbing firm Ferguson moved its main listings are in the United States.
Under the terms of the deal, Tyman shareholders will receive 240 pence in cash and 0.05715 new Quanex shares for each Tyman share held.
The offer is equivalent to 400 pence per share and represents a premium of about 35.1% to Tyman’s London-listed closing price of 296 pence on Friday.
“Given the reasonable assessment and industrial,
Based on the strategic and financial logic of the merger, we expect the transaction to be completed later this year,” Investec analysts said.
The directors of Quanex and Tyman intend to unanimously recommend that their shareholders vote in favor of the proposed transaction.
Tyman’s largest shareholder, Teleios Capital Partners with a 16.4% stake, supported Quanex’s proposal.
Quanex directors said they believe the acquisition will help create a more diversified supplier to the building products sector.
Quanex expects significant operating cost synergies of $30 million to be fully realized by the second year following completion of the transaction.
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The Texas company also said it would delist Tyman from the London Stock Exchange and the combined group would be listed on the New York Stock Exchange, Quanex said in a joint statement.
($1 = 0.8077 pounds)