Pipe powers join
January 25, 2007
J-M Manufacturing (JMM; Livingston, NJ) and PW Eagle (Eugene, OR)—two leading pipe manufacturers headquartered on opposite coasts with manufacturing facilities spread in between—have announced a tentative merger that would create a North American pipe giant featuring 26 plants and estimated revenue well over $1 billion. In the deal, which is pending shareholder approval but has been agreed to in principal by the company&146;s largest shareholder, JMM would purchase all outstanding shares of PW Eagle for $33.50, for an equity value of approximately $400 million. According to JMM Marketing Director Marc Miller, PW had estimated 2006 revenue of $790 million. As a private company, JMM doesn&146;t release financial data, but according to Plastics News’ June 26, 2006 ranking of North American pipe, profile, and tubing extruders, it has annual sales of $1.2 billion.
The process began on May 30, 2006, when PW&146;s board of directors created a strategic committee to explore alternatives to better the company, eventually conducting an auction to gauge interest in the business. Pending approval, the deal is expected to close in the second quarter of 2007.
JMM, formerly a subsidiary of Formosa Plastics Corp. USA but separate and privately held since the fall of 2005, was created in 1982 through the purchase of eight polyvinyl chloride (PVC) pipe plants from Johns Manville Corp.
According to JMM&146;s Miller, the proposed combined company will offer diameter ranges of ½ inch to 48 inches in PVC and ½ inch to 63 inches in polyethylene (PE), while also processing acrylonitrile butadiene styrene (ABS) and crosslinked PE pipes, in addition to PE and PVC.—[email protected]
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