Orangeburg wood treatment company Cox Industries Wednesday sold its industrial division, effectively ending the 66-year history of the family-owned business.
Orangeburg's Cox Industries Inc. industrial division (Cox Industrial) was sold to Pittsburgh-based Koppers Inc. for $200 million in cash, according to a company press release.
Koppers is a wholly owned subsidiary of Koppers Holdings Inc. (NYSE: KOP), a global provider of treated wood products, wood-treatment chemicals and carbon compounds.
The sale closed Wednesday at the close of business, according to the release.
Under the terms of the transaction, Cox Industrial plants in North (North/South Wood Preserving) and Eutawville (Carolina Pole Inc.) will be renamed the Utility and Industrial Products unit of Koppers. The plants will remain in operation.
"The entire management team and workforce will remain in place to run the Koppers Utility and Industrial Products unit," said Richard Lackey, Cox spokesman.
Like Cox Industrial, the plants will continue to manufacture and distribute power-distribution and transmission poles, pilings and related products to investor-owned utilities, electric cooperatives, municipalities and other entities.
Cox has a total of 10 industrial plants nationally.
"We know Koppers well, having enjoyed a strong relationship with the management team over the years, and we share a commitment to providing innovative products and strong customer service to our served markets," Cox Industries Inc. President and CEO Mikee Johnson said in a prepared statement. "We believe that our complementary customer-centric mindset, expanded product portfolio and enhanced innovation and geographic reach should benefit our collective stakeholders."
Johnson will serve as vice president of the utility and industrial products unit of Koppers. He will also serve as a member of the executive team of Koppers.
The transaction makes Kopper a leading utility pole and wood-treatment producer and advances the company's strategy of being a "vertically integrated, high-value global supplier of wood-based technologies to infrastructure markets," according to the press release.
"We are thrilled to return to the U.S. utility pole market with a significantly larger presence than when we exited the business in January 2015," Kopper President and CEO Leroy Ball said. "While we were working hard during the past several years to restructure our operations and reduce our balance sheet leverage, Cox Industrial grew to become the largest supplier of utility poles in the eastern U.S."
Ball continued, "The opportunity to re-enter this market with the scale to better compete, along with gaining a growth-focused management team, was attractive and compelling. In addition to numerous synergies being explored, we plan to focus on continuing to grow the business organically as well as through strategic partnerships and select acquisitions."
Koppers found Cox Industrial attractive due to its national presence, its scale of treatment options and a proven track record of storm response.
The company also cited the Cox plants' proximity to railroads ports to facilitate shipments throughout the U.S.
The operations include eight manufacturing locations, three dedicated peeling facilities and 19 reload yards, which support its market leadership position and opportunities for further growth in key expansion markets.
The sale of the industrial division comes less than four months after Cox sold its residential lumber division to Virginia-based Culpeper Wood Preservers.
Included in that sale were the Cox manufacturing plants located in Orangeburg and Branchville, as well as plants in Coleridge and Cove City, North Carolina.
These residential division plants are now operating under the Culpeper name.
With the Utility and Industrial Products unit, Koppers now expects that 2018 sales will be approximately $1.9 billion.
On an adjusted basis, the acquisition is expected to contribute $0.15 to $0.20 in earnings per share (EPS) in 2018 before achieving an annualized run rate of $0.40 to $0.50 per share in 2019.
Kopper has facilities located in North America, South America, Australasia, China and Europe.
The stock of Koppers Holdings Inc. is publicly traded on the New York Stock Exchange under the symbol "KOP."