New Zealand’s Fletcher Building has sold its Roof Tile Group (RTG) business to Canada’s IKO group for US$39m, about $13m below its value, the company announced yesterday.
RTG is a maker and distributor of metal roof tiling systems, operating under the Gerard, Fortiza and Decra brands. It employs 450 people, manufactures in Asia, Europe and the US, and sells products globally.
Ross Taylor, Fletcher Building’s chief executive, said: "We are pleased to complete the RTG divestment in a timely way. The sale is in line with Fletcher Building’s five-year strategy to divest our international operations to focus our capital and capability behind our New Zealand and Australian businesses, with building products and distribution at our core."
He added that the next non-core business to be divested would be its Formica laminate subsidiary, which Taylor said he was "confident" would be sold in the 2019 financial year.
The sale was below Roof Tile’s carrying value, meaning Fletcher will book a non-cash loss of NZ$15m to NZ$20m. However, the firm said this won’t impact its underlying earnings outlook.
Fletcher Building is reconstructing itself after making losses of about $660m over the past two years.
Fletcher’s shares fell 3.3% to $5.84 on news of the sale.
Ontario-based IKO is a family business specialising in roofing, waterproofing and insulation for the residential and commercial markets. It has more than 30 manufacturing plants throughout North America and Europe.
IKO said RTG would continue to run its operations on a "business as usual" basis while the company focuses on inducting its new employees and gaining familiarity with RTG’s operations.
Image: The Roof Tile Group pioneered metal roofing systems (RTG)