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SCOTT BARANCIKShedding its South Carolina aluminum subsidiary should help Tampa's Walter Industries simplify operations.
TAMPA - In a further narrowing of its focus, Walter Industries of Tampa agreed Thursday to sell its 23-year-old aluminum subsidiary.
Wellspring Capital LLC of New York will pay $125-million for JW Aluminum, a 400-employee maker of flat-rolled aluminum used in air conditioning units, home siding and gutters. Walter founded the Mount Holly, S.C., company in 1980 but has been trying on and off for several years to divest it.
"Selling JW Aluminum, as well as announcing the sale of (petroleum coke distributor) Aimcor last month, puts us well on our way to making the company less complex," said Joe Troy, senior vice president of financial services at Walter. "We believe that simplifying our story should help attract investors."
No Wall Street analysts currently rate Walter's stock. The company hopes that focusing on its home building, home finance and pipe-building businesses will clarify its brand and purpose.
Wellspring Capital partner William F. Dawson Jr. said in a news release that JW Aluminum would be an "outstanding addition to our portfolio of companies." It presumably will fit well with Wellspring subsidiary Residential Services Group Inc., which provides heating, ventilation, air conditioning and refrigeration services to the residential and commercial markets.
Walter's divestiture of JW Aluminum leaves it with two other key subsidiaries to sell: coal and natural gas company Jim Walter Resources of Brookwood, Ala., and Sloss Industries of Birmingham, Ala., a maker of coal-based fuels used to melt iron and steel. Walter has been trying to sell the coal unit since March 1999.
Both units are good performers with substantial downsides. In May, Alabama officials slapped Sloss with the biggest environmental fine in state history for polluting a creek. In 2001, an accident at Jim Walter Resources left 13 miners dead and led to a critical report from federal safety officials.
The sale of JW Aluminum also was a long time in coming. Walter put the unit up for sale in late 2000. None of the subsequent bids came close to Walter's undisclosed asking price, however, and Walter removed the for-sale sign in 2001. At the time the company blamed the sluggish economy, tighter credit, reduced demand for aluminum and falling commodity prices.
Banc of America Securities represented Walter in Thursday's deal, which, like the $127.7-million Aimcor sale in September, is expected to close in the fourth quarter.
Walter's stock closed Thursday at $11.40, up 1 cent per share. It announced the JW Aluminum deal after the stock market closed.
- Scott Barancik can be reached at barancik@sptimes.com or 727893-8751.