USG Sells L&W to ABC Supply
USG completed the sale of its building products distribution business, L&W Supply Corp., to ABC Supply Co. Inc. for a total cash consideration of $670 million.
The completion of this previously announced transaction will allow USG to reduce debt and achieve its target leverage ratio, while creating new opportunities to accelerate high-margin growth with advanced manufacturing initiatives in its core Gypsum and Ceilings businesses. The sale will also allow USG to continue its strong relationship with L&W Supply, one of its largest customers, while providing incremental opportunities for growth in the independent specialty dealer channel. It is expected to decrease USG’s overall earnings cyclicality and will position the company to consider future capital returns to shareholders.
“It is an exciting time for all of us at USG as we look to increase investment in advanced manufacturing initiatives that will allow us to grow and commercialize new innovations to even better meet the needs of our customers,” said Jennifer Scanlon, CEO-Elect of USG Corp. “We have made tremendous progress with Our Plan to Win and move forward with a strong balance sheet and a singular focus on what we do best, which is manufacture great products. I am incredibly proud of our industry-leading USG team and look forward to seeing all we will achieve together as a result of the latest steps we’ve taken to strengthen our financial position.”