{"id":23517,"date":"2016-11-21T00:00:00","date_gmt":"2016-11-20T11:00:00","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/tenon-shareholders-agree-to-sell\/"},"modified":"2016-11-21T00:00:00","modified_gmt":"2016-11-20T11:00:00","slug":"tenon-shareholders-agree-to-sell","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/news\/tenon-shareholders-agree-to-sell\/","title":{"rendered":"Tenon shareholders agree to sell"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

The sale and capital return were approved with a more than 99.5% majority at the annual meeting in Auckland, the Taupo-based company said in a statement.<\/p>\n

Among minority shareholders more than 98% voted in favour.<\/p>\n

The sale for US$110m represented a 2016 ebitda multiple of 7.3 times, at the lower end of the range in advisory firm Grant Samuel's assessment.<\/p>\n

Tenon,controlled by NZX-listed Rubicon, said the capital return of US$1.10 a share was expected to be completed by the end of December, with a record date of December 21, subject to receipt of final High Court orders relating to the return.<\/p>\n

Blue Wolf was buying the North American operations via its BW Empire Holdings unit. It described itself as a private equity firm and Tenon USA joined a portfolio including the Twin Rivers Paper Co, American Builders Supply and Suwannee Lumber Co.<\/p>\n

Tenon USA comprises three distribution and manufacturing operations: Empire, Southwest Mouldings and Ornamental Products.<\/p>\n

The company's presentation for the annual meeting said the US business had grown "far beyond" what was envisaged when it was set up in the early to mid-2000s.<\/p>\n

While the supply of clear wood products was still critically important to both parties, it could be addressed through a product supply agreement.<\/p>\n

Tenon USA's purchases from Taupo now accounted for just 10% of what the American business bought and made up less than 20% of sales from Tenon's Taupo plant.<\/p>\n

Following the sale, Tenon's remaining business would be its Clearwood unit, which was also under strategic review and had positive earnings, strong cashflow and limited capex requirements, the company said.<\/p>\n

It would return the capital, US$71.3m, or $1.55 a share at an exchange rate of 71 US cents, by cancelling one out of every two shares held and returning $2.20 per cancelled share.<\/p>\n

Clearwood was being reviewed by investment bank Deutsche Craig.<\/p>\n

The New Zealand business was valued at between US$63.3m and US$74.1m in independent adviser Grant Samuel\u2019s report on the US transaction.<\/p>\n

Its sales rose 5% to USS$81m in the year ended June 30 while earnings before interest, tax, depreciation and amortisation more than doubled to US$12m.<\/p>\n

Blue Wolf made its offer for Tenon's North American operations on August 29. A year earlier, Tenon kicked off a strategic review of the company with Deutsche Craig to close what it described as "the perceived value gap that was evident in the share trading price at the time".<\/p>\n

Grant Samuel expected Tenon would be liquidated above market value of $164m if the US sale went ahead and the Clearwood business was subsequently sold within its valuation range.<\/p>\n

In its 2016 annual report Tenon said the sales process run by Deutsche had determined there were different potential buyers for the company's US and NZ businesses and that "to optimise value for shareholders separate review processes should be run in respect of these two asset classes".<\/p>\n

Tenon's shares last traded at $2.60 and had declined about 7% this year. Rubicon, which owned 59.8% of Tenon, last traded at 22 cents and had fallen 23% so far in 2016. – BusinessDesk<\/p>\n","protected":false},"excerpt":{"rendered":"Tenon shareholders have approved the sale of the wood processor’s United States business to New York-based buyout firm Blue Wolf Capital, allowing the company to make a $100 million capital return via a share cancellation.\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[3],"tags":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t