Wood products company Tenon Ltd announced today its newly-acquired subsidiary, The Empire Company, has made a Texas-based purchase that expands its reach into the United States.
Empire has purchased a 51 per cent interest in Southwest Moulding Co, a Dallas, Texas-based moulding and millwork distributor, for around US$16 million ($23.49
million).
"The acquisition of Southwest will help us achieve our goal of a more balanced customer mix in North America, and will provide Empire with a new platform for growth in one of the strongest regional markets in the USA for our products," Mark Eglinton, Tenon's chief executive officer, said.
Southwest, incorporated in 1952, makes stair parts and exterior doorframes, and distributes mouldings and other related millwork products. The firm employs 120 people and its head office is located in Dallas.
Tenon moved to full ownership of Empire - a leading distributor and manufacturer of wood mouldings in the United States - in September.
Southwest's current owners, Don Bell and Ron Middleton, have an option to sell the remaining balance of 49 per cent to Empire from July 2007. That option is for a period of two years.
Empire also has a call arrangement for the remaining interest.
Mr Bell will continue as chief executive officer and president of Southwest, and Ron Middleton as Southwest's vice president of sales and marketing.
Shares in Tenon, which have fallen sharply this week after the company downgraded its earnings expectations, were untraded today. They closed yesterday at $3.60, against a year high of $4.72.
Tenon forecast its earnings before interest, tax, depreciation and amortisation to be in a range of US$17-20 million for the 2006 financial year, compared with US$24 million the previous year.
- NZPA
