Leggett sells aluminum unit in $325M-plus deal

The sale closed on Wednesday, according to a news release. Carthage-based Leggett received $300 million in cash, a $25 million subordinated note and shares of preferred stock with value not to exceed $25 million, the release said.

Leggett’s aluminum operations – primarily under wholly owned subsidiary Pace Industries – manufacture, design and sell aluminum die cast products and tools and dies for customers in mostly nonautomotive markets. Pace has 31 facilities, 29 of which are in the U.S. and two are in Mexico, according to Leggett’s Securities and Exchange Commission 8-K filing.

The company plans to use most of the cash from the sale to repurchase Leggett common stock throughout the rest of the year, the filing said, and the transaction is “not anticipated to result in a significant book gain or loss.”

Leggett first announced it would divest its aluminum products segment in November 2007 as part of a restructuring plan that would cut one-fifth of its portfolio to improve shareholder return. The plan called for selling or liquidating seven business units, which together generate about $900 million in annual revenue. Pace was the largest of the seven.

“From an overall perspective, we have now received 75 percent of the $400 million of after-tax cash proceeds we originally anticipated from the divestiture of our seven targeted business units,” Leggett CEO and President David S. Haffner said in the release. “While cognizant of the ongoing difficult market environment for (merger and acquisition) transactions, we are diligently proceeding with, and optimistic about, the disposition of our six remaining business units during 2008.”

The manufacturer’s second-quarter results are scheduled to be released after market-close today. Shares (NYSE: LEG) closed Wednesday at $16.05, compared to a 52-week range of $14.12 to $22.78.