Leggett and Platt sells aluminum division

John Hacker

Fortune 500 manufacturer Leggett and Platt, based in Carthage, Mo., got about 10 percent smaller after selling a major subsidiary Wednesday.

The company announced Thursday that it sold its aluminum products branch, formerly known as Pace Industries, to the New York-based investment firm Kenner & Co. for $300 million in cash and between $25 million and $50 million in stock.

Susan McCoy, director of investor relations, said Pace Industries had sales last year of more than $500 million, making up 10 percent of Leggett's total sales. Pace Industries, based in Fayetteville, Ark., has 19 plants in Fayetteville, Harrison, Ark., Jonesboro, Ark., Monroe City, Mo., and across the U.S. and Mexico.

"This is a significant sale," McCoy said. "It was very good news for us in the market when the market was concerned about our ability to sell this big a unit because of the tight credit situation. It's a major accomplishment to be able to sell this unit in this market."

The sale was closed Wednesday.

According to a company release: "The divestiture is part of a broad strategic plan, first announced last November, that includes, among other things, elimination of approximately one-fifth of Leggett's business portfolio via the sale or liquidation of seven business units.

"Of the seven units (which collectively generate about $900 million in annual revenue), the company's Aluminum Products segment is the largest, and is North America's largest independent manufacturer of non-automotive aluminum die-castings. Existing senior management of the Aluminum Products segment will continue to lead the operations for the new owner, and will become significant equity participants in the acquired company."

In the same release, Leggett CEO and President David Haffner said he was pleased to announce the completion of the transaction "which generates approximately $300 million of after-tax cash proceeds immediately, and also provides potential future value in the form of a subordinated note and preferred stock."

Leggett will hold a conference call at 8 a.m., Central time Friday to discuss business conditions and earnings in the second quarter of 2008.

The call will be broadcast over the Internet by Thompson Financial and the Webcast can be accessed through the investor relations section of Leggett's Web site,

Carthage Press