The second time was the charm for a subsidiary sale by Springfield-based stainless steel manufacturer Paul Mueller Co. (OTC: MUEL).
Mueller Co. on Dec. 31 closed on the sale of Mueller Field Operations Inc. to the subsidiary's management team, according to a news release. A year earlier, a purchase agreement for MFO was called off at a substantially higher valuation, according to past reporting.
The sale price for MFO was $3.5 million, with adjustments for working capital based on the final Dec. 31 balance sheet and a potential earnout of $800,000.
In late 2020, Mueller Co. signed a letter of intent to sell MFO to its management for an estimated $6.6 million. That deal was terminated within a month, and Mueller Co. President and CEO David Moore said at the time "it was in all of our interests for the companies to continue supporting one another in the current structure.”
A reason was not given in the release for the renewed deal talks, and a spokesperson could not be reached immediately for comment by deadline. The transaction includes a noncompete agreement and a supply arrangement outlining how the companies will continue to support each other.
Organized as a Mueller Co. subsidiary in 1998, MFO was designed to allow the company to compete for larger contracts requiring tank fabrication on site and other field-installed equipment. The release states that "MFO activities and services are different than those of the parent company, and this transaction will allow each to focus on their respective specialties."
During the third quarter, Mueller Co. reported a net loss of $1 million, compared with profits of $4 million a year earlier.
Mueller Co.'s over-the-counter stock closed Friday at $41, compared with a 52-week range of $34.30 to $53 per share.
The expanded facility is expected to reach annual revenue of $650M.