St. Paul, MN, October 19, 2006--H.B. Fuller Co. announced today that it has reached a definitive agreement to sell its Powder Coatings business to The Valspar Corp.
The Powder Coatings business, which is part of the Company's Full-Valu / Specialty segment, has four manufacturing plants and employs about 175 people in the United States and the United Kingdom. In fiscal year 2005, it had net revenue of approximately $75 million. As a result of the announced agreement, the Company will present the results of its Powder Coatings business as "Discontinued Operations" for all periods reported.
"This divestiture is yet another step in the Company's transformation and is consistent with our repositioning strategy," said Al Stroucken, Chairman and Chief Executive Officer. "By focusing on the areas where we have market leadership and generate the highest return on capital, we are better positioning the Company to capitalize on more strategic growth opportunities in the future."
The Company anticipates this transaction will generate a one-time positive impact to pre-tax income of $50 to $60 million. This includes the expected gain on the sale, partially offset by certain transaction-related costs. Aside from this one-time positive impact, the transaction is not expected to have a material effect on the Company's net income in fiscal year 2007.
"Our Powder Coatings business will be a strategic asset to Valspar and given their broad product offering, it will be better positioned to achieve its full potential," said Steve Large, Group President and General Manager of the Full-Valu / Specialty Group.
This transaction is expected to close no later than the end of the first quarter of 2007 and is subject to customary closing conditions and regulatory approvals. Additional details will be provided on the Company's fourth quarter 2006 investor conference call.
