LIXIL Group Corporation, maker of pioneering water and housing products, announced today it has entered into a definitive agreement to sell Permasteelisa S.p.A. (“Permasteelisa”) to Atlas Holdings LLC (“Atlas”).
Atlas and its affiliates own and operate a diversified group of global manufacturing, distribution and construction businesses with a unique emphasis on safety and operational improvement. The transaction is subject to customary closing conditions and regulatory approvals. Terms of the transaction were not disclosed.
Permasteelisa is a leading global contractor in the engineering, project management, manufacturing, installation and after-sales services of advanced building façades, architectural envelopes and interiors. The company has brought to life some of the most iconic buildings defining city skylines today, from the Shard in London to Apple’s HQ campus in Cupertino, the World Trade Center redevelopment in New York, where the group worked on 1WTC, 3WTC and 7WTC, through to the World Financial Center in Shanghai and the International Commerce Center in Hong Kong. Operating out of its group headquarters in Vittorio Veneto in Italy, the company has worked with architects around the world on over 3,500 projects to date.
“We are pleased to have reached an agreement that will allow Permasteelisa, a world-class brand in the area of highly specialized curtain walls, to become part of the Atlas family of global businesses. We believe Atlas is the ideal owner for Permasteelisa, as they bring a strong record of delivering the human and financial capital necessary to strengthen businesses for the long-term,” said Kinya Seto, CEO of LIXIL Group. “For LIXIL, today’s agreement enables us to reduce our risk exposure in non-core areas of operation and represents a new chapter in our transformation as we focus on strengthening our water and housing technology businesses and seek to invest more resources in these high growth areas.”
The transaction is in line with LIXIL Group’s ongoing efforts to simplify its business structure and focus on its core businesses, enabling further synergies and efficiencies through enhanced integration. As Permasteelisa’s operations are significantly different to those of LIXIL Group’s core business operations in terms of business cycles and other factors, the sale will also enable LIXIL Group to simplify and eliminate ongoing exposure to different types of risks. This transaction is also expected to strengthen the company’s balance sheet as well as financial strength by generating cash, reducing debt, and improving working capital efficiency, enabling LIXIL Group to further invest in new and profitable growth areas across its core businesses as it strives to make better homes a reality for everyone, everywhere.
“We are excited to have reached an agreement to acquire Permasteelisa, as we believe the company has a solid foundation in place for success, particularly as a focused, stand-alone business that is well capitalized,” said Timothy J. Fazio, Co-Founder and Managing Partner of Atlas. “The company has a strong management team led by Klaus Lother, and a skilled workforce. When coupled with our expertise in the building materials and commercial construction markets and our attention to client satisfaction, innovation and operational improvements, we will build an even stronger company in the months and years ahead.”
Permasteelisa Group CEO, Klaus Lother added, “Permasteelisa drives innovation in the curtain wall sector by integrating design, engineering, manufacturing capabilities and project management to achieve works of excellence worldwide. Under LIXIL’s guidance and with the consolidation of our leadership role, we were able to respond to significant challenges in an increasingly complex and competitive landscape. We are now entering a new phase of our evolution. We thank LIXIL for its full and constant support and are confident that with the ownership and support of Atlas Holdings, we will continue our evolution whilst generating value within the construction sector.”
While details of accounting treatments and presentation methods are now under discussion with the auditor, in line with International Financial Reporting Standards (“IFRS”), Permasteelisa will be classified as discontinued operations in LIXIL Group’s financial reports. In addition, contingent liability is expected to decrease by approximately 150 billion JPY, which is expected to have a positive impact on fund raising costs, etc. As a result of this transaction and other factors, LIXIL Group today also announced a revision to its full year financial forecast. Full details can be found in the timely disclosure, “Announcement Regarding Revision of the Forecast of Business Performance For the Fiscal Year Ended March 2020 (Consolidation) and Recording of Extraordinary Loss from a Subsidiary in Japan.”