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Leggett & Platt pens $1.3B acquisition

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Leggett & Platt Inc. (NYSE: LEG) announced an acquisition to the tune of $1.25 billion.

The Carthage-based manufacturer of engineered components and products for homes, offices and vehicles entered a definitive agreement to buy Newnan, Georgia-based Elite Comfort Solutions Inc.

Approved by the Leggett & Platt Board of Directors, the $1.25 billion cash buyout is expected to be completed in January 2019, pending regulatory approvals and customary closing conditions, according to a Nov. 7 news release.

A portfolio company of New York City-based private equity firm Arsenal Capital Partners, ECS ended its fiscal year on Sept. 30 with $611 million in sales. Via 16 plants in the United States, the company makes speciality foam, as well as the chemicals and additives used in foam production, that’s incorporated in mattresses, mattress components, toppers and pillows, and furniture.

"Through the combination of Leggett & Platt and Elite Comfort Solutions, we will become the leading provider of differentiated products for the bedding industry and gain critical capabilities in proprietary foam technology, along with scale in the production of private-label finished mattresses,” Leggett & Platt President and CEO Karl Glassman said in the release, noting ECS also provides services for e-commerce, retail and original equipment manufacturer clients.

To finance the deal, Leggett & Platt intends to rely on the recent expansion of its commercial paper program and related revolving credit agreement, as well as a new $500 million, five-year loan. Company officials also may consider issuing debt notes, suspending share repurchases and reducing other acquisition spending.

When the transaction is finalized, ECS would be a separate business unit that would operate under Leggett & Platt’s residential products segment. The company plans to keep ECS’s 16 manufacturing plants and warehouses open, according to the release.

Leggett & Platt recently reported third-quarter earnings of $90 million, a 9 percent increase from a year earlier.

LEG shares were trading at $37.49 as of 9:29 a.m., compared with a 52-week range of $34.07 to $49.88.


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