Melrose sells windows and doors unit to AIM-listed Tyman

Melrose, the industrial conglomerate which buys and sells manufacturing businesses, has agreed to dispose of its Truth Hardware division to AIM-listed building products group Tyman.

Truth Hardware, which was first acquired as part of Melrose's takeover of engineering and manufacturing company FKI in 2008, designs and manufacturers components for North American producers of fenestration products including windows and patio doors.

The division, which made an operating profit of $18.6m in 2012 on sales of $126m, is being sold to Tyman for a total consideration of $200m (£129m) and is payable in cash on completion.

Melrose said it would use the proceeds to pay down existing borrowings.

"We are very pleased with the progress Truth has made since our acquisition of FKI Plc in 2008 and we believe it is now well placed for the future," said Melrose Chief Executive Simon Peckham.

"As planned at acquisition, we are disposing of Truth at the early stages of what appears to be a recovery in the United States housing market.Tyman is well positioned to add further value to the business and we wish them and Truth all future success."

Tyman, formerly known as Lupus Capital, is an international supplier of building products to the door and window industries. The company said it sees this as a "strategic opportunity" to develop its position in the North America door and window components market.

The firm is to fund the acquisition by a combination of a placing and open offer to raise £73m, a $100m new term loan and existing cash reserves.

"The acquisition presents a number of substantial opportunities for Tyman and we look forward to growing our enlarged platform in North America to create an outstanding supplier for our customers and to deliver superior value for our shareholders in the future," said Tyman's Non-Executive Chairman Jamie Pike.