NCI Group Inc, a wholly-owned subsidiary of NCI Building Systems Inc. (NCS) completed the deal with MSC Pre Finish Metals Inc., a subsidiary of Material Sciences Corp., purchasing MSC Pre Finish’s coating facility located in Middletown, Ohio.
NCI Group closed the deal for $4.9 million in cash. This deal includes a 170,000 square foot coil coating plant and substantially all the operating assets of the company. This idle facility occupies 21 acres of land.
With the purchase of this facility, NCI expects to extend its coil coating operation into the upper Midwest and Northeast, where the Company’s Buildings segment and Components segment already have a footprint. After the facility starts functioning, we believe it will provide increased productivity and capacity at a much lower cost than building a new plant.
NCI has two segments, the Engineered Building Systems segment and the Coatings and Components segment. NCI’s Engineered Building Systems segment is badly hit by weak non-residential construction activity and had witnessed losses in the second quarter of fiscal 2010. The Coatings and Components segment witnessed a profit in the quarter. We appreciate the strategy of the company in focusing on the segment that is reaping benefits.
During the second quarter release, NCI Building Systems unveiled its plan to invest in technology, broaden its geographical base, ramp up marketing and diversify by capturing new businesses. This deal is in sync with the second quarter guidance of the company.
Founded in 1984, Houston, Texas-based NCI Building Systems is an integrated manufacturer of metal products for the North American non-residential construction industry. It has its manufacturing plants across the U.S. and Mexico, as well as distribution facilities throughout the U.S. and Canada.
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