Patrick Industries Inc. announced Wednesday (July 22) that it signed a definitive agreement to sell certain assets of its aluminum extrusion operation located in Mishawaka, Ind., to Patrick Aluminum Inc., a member of the UMC family of companies.
The transaction is expected to be completed by the end of July. Net proceeds from the sale are expected to be approximately $7.4 million and are subject to final transaction costs and certain closing adjustments, according to a news release.
Elkhart, Ind.-based Patrick is a major manufacturer and distributor of building and component products for the recreational vehicle, manufactured housing and industrial markets.
The aluminum extrusion operation produces and paints semi-fabricated and fabricated aluminum extrusions for structural and non-structural applications, and comprised Patrick’s Engineered Solutions business segment. This business segment was classified as a discontinued operation in the fourth quarter of 2008.
The company anticipates using a portion of the net proceeds received from the sale of fixed assets and the building that houses the aluminum extrusion operation to pay down principal on the Company’s term loan and pay off the Economic Development Revenue Bonds related to this facility in the third quarter of 2009.
Todd Cleveland, president and CEO said, “This divestiture reflects our continued commitment to reduce our leverage position to an acceptable level during these difficult economic times, to the benefit of both our lenders and our shareholders. We continue to execute and deliver on our strategy to align our current operations with businesses within our core competencies, reduce overall fixed costs, and position the Company to be able to take advantage of any upticks in our end markets.”
The aluminum extrusion operation will continue to operate under the name “Patrick Metals.”
Cleveland further commented, “While no longer a member of the Patrick family, we wish the team at Patrick Metals, as well as the UMC Companies, continued success and prosperity with this operation, which has represented Patrick Industries with class throughout its entire tenure as a division of the Company.”
Patrick Industries manufactures component products and distributes building products serving the manufactured housing, recreational vehicle, kitchen cabinet, home and office furniture, fixture and commercial furnishings, marine and other industrial markets and operates coast-to-coast through locations in 13 states.
Patrick’s major manufactured products include decorative vinyl and paper panels, wrapped moldings, cabinet doors and components, slotwall and slotwall components, and countertops. The company also distributes drywall and drywall finishing products, interior passage doors, flooring and roofing products, vinyl and cement siding, ceramic tile and other miscellaneous products.