Airgas to sell Rutland Tool
Airgas, Inc. announced that it had reached a definitive agreement to sell the assets and operations of Rutland Tool & Supply Co., Inc., a Whittier, CA-based Airgas subsidiary, to Lawson Products, Inc.
Rutland Tool, which distributes metalworking tools, machine tools and MRO supplies from seven locations and has about 180 employees, generated $47 million in sales in the fiscal year ended March 31, 2005. The closing is expected on or before Dec. 1, 2005, subject to customary closing conditions. Proceeds of the sale will be approximately $15 million at closing with subsequent consideration for trade receivables paid as they are collected.
As a result of the sale, Airgas will reflect the operating results of Rutland Tool as discontinued operations and will recognize a loss on the sale of approximately $2.3 million after-tax or $0.03 per diluted share in the third quarter ended Dec. 31, 2005. The loss principally relates to the write-off of leasehold improvements and lease termination costs for long-term lease commitments that are not being assumed by the purchaser. Earnings from continuing operations for the third quarter and fiscal 2006 are expected to be within the previously forecast range of $0.37 to $0.39 per diluted share and $1.50 to $1.56 per diluted share, respectively. The sale will not materially affect future earnings.
Airgas will retain its facility in Whittier, CA, where it also operates a major hard goods distribution center and Airgas Safety telesales center. Lawson intends to relocate the Rutland Tool Whittier operations in the coming year. The six other Rutland operations in Chatsworth, Santa Ana and San Jose, CA; Phoenix, AZ; Houston, TX; and Suwanee, GA will be transferred with the business.
Lawson Products, based in Des Plaines, IL, sells and distributes services, products and systems to the MRO and OEM marketplaces.
"Rutland Tool will be a good strategic fit with Lawson's business," said Airgas Chairman and CEO Peter McCausland. "We wish Lawson the best and we are pleased that our two companies will maintain a strong supply relationship with each other. Our regional companies have the ability to continue to buy tools as needed from Rutland, and Rutland will continue to have the ability to buy safety and other supplies from Airgas."
"The acquisition of Rutland Tool will accelerate Lawson's growth strategy by expanding our product lines into the machine tool industry, enhancing our presence in critical Western markets and providing access to a broad range of new customers," said Lawson CEO Robert J. Washlow.
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