Worthington Buys Majority Stake in TWB
Metal processor Worthington Industries (WOR) has completed a deal with Chinese steel company Wuhan Iron and Steel Company (:WISCO) to purchase a majority interest in Tailor Welded Blanks (:TWB), its laser welded blanking joint venture. Terms of the deal were not divulged.
TWB was formed in 1992 as a joint venture between Worthington and German steel maker ThyssenKrupp AG. ThyssenKrupp sold their interest in TWB to WISCO in July 2013.
Worthington acquired an additional 10% share in TWB immediately following WISCO's purchase of ThyssenKrupp AG's ownership in TWB. Worthington now holds a 55% stake in TWB.
TWB makes tailor welded blanks for the automotive market. It works with customers to lower the weight of vehicles and help reduce manufacturing costs. Following the additional stake purchase, the TWB joint venture will now be consolidated into Worthington’s Steel Processing division.
Worthington saw its profit slip in fourth-quarter fiscal 2013 (ended May 31) as it had to take sizable impairment and restructuring charges. Worthington posted earnings of 46 cents a share in the quarter, down from 75 cents earned a year ago. Profit slipped 36% year over year to $33.5 million. Revenue fell 7% year over year to $704.1 million, hurt by lower average selling prices due to falling market price of steel.
Worthington is positive about the new fiscal year and expects growth both organically and from its acquisitions. The company is seeing strength in automotive market and envisions some improvement in commercial construction. Worthington expects its engineered cabs business to gain from the full implementation of the transformation to optimize and improve operations.
Worthington is engaged in processing steel for application in the automotive, construction, hardware, agricultural, aerospace and other industries. The company makes a range of processed steel items, pressure cylinders (including oxygen and helium tanks and hand torches), metal framing products, racks, shipping pallets, airbrake tanks and consumer products. The company operates 83 facilities throughout 11 nations.
Worthington currently retains a Zacks Rank #3 (Hold).
Other companies in the metal processing and fabrication industry having favorable Zacks Rank are NSK Ltd. (NPSKY), CIRCOR International, Inc. (CIR) and Northwest Pipe Co. (NWPX). All of them hold a Zacks Rank #1 (Strong Buy).
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