Mattr Signs Definitive Agreement to Sell Its Brazilian Pipe Coating Business to Vallourec For US$17.5M

Rhea-AI Summary

Mattr Corp. (TSX: MATR) has announced a definitive agreement to sell its Brazilian pipe coating subsidiary, Thermotite do Brazil, to Vallourec Tubular Solutions for US$17.5 million (approximately CAD$24 million). This transaction marks the final divestment of Mattr's pipe coating business, aligning with the company's strategy to simplify its portfolio and focus on high-return growth in core businesses.

The deal, subject to regulatory approvals, is expected to close within the standard review time. Mattr will retain control and earnings from Thermotite until closing. CEO Mike Reeves stated that this transaction concludes their strategic review process and enhances Mattr's ability to deliver focused growth in remaining core businesses. Thermotite will be reported as an asset held for sale effective September 2024.

Positive

• Sale of Thermotite do Brazil for US$17.5 million, strengthening Mattr's financial position
• Completion of strategic review process, simplifying the company's portfolio
• Focus on high-return growth in core businesses
• Retention of control and earnings from Thermotite until transaction closure

Negative

• Divestment of final pipe coating business, potentially reducing revenue streams
• Potential loss of market presence in the Brazilian offshore oil and gas industry

News Market Reaction

+2.98%

1 alert

+2.98% News Effect

On the day this news was published, MTTRF gained 2.98%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

TORONTO, Sept. 16, 2024 (GLOBE NEWSWIRE) -- Mattr Corp. (“Mattr” or the “Company”) (TSX: MATR) announced today that it has entered into a definitive agreement to sell its subsidiary, Thermotite do Brazil (“Thermotite”), to Vallourec Tubular Solutions, a subsidiary of Vallourec S.A. (“Vallourec”) (EPA:VK). Thermotite provides thermal insulation pipe coating services to the offshore oil and gas industry from its plant in Serra, Brazil and is the Company’s final remaining pipe coating business.

The transaction, under which Vallourec will acquire 100% of the shares of the Thermotite legal entity, is subject to customary closing conditions, including regulatory approvals, which the Company currently anticipates will be completed within the standard review time. The Company will control and retain all earnings from Thermotite until the transaction closes, and upon closing the Company expects to receive gross sale proceeds of at least $17.5 million USD or approximately $24 million CAD at current exchange rates, on a cash-free, debt-free basis, subject to normal working capital adjustments.

“Once complete, the transaction announced today concludes our strategic review process,” said Mike Reeves, Mattr’s President and CEO. “Aligned with the Company’s actions over the last three years to simplify our portfolio, lower volatility and increase full-cycle margins, this announcement - and the proceeds ultimately expected from this transaction - further enhances Mattr’s ability to deliver focused, high-return growth in our remaining core businesses. While it will take several months to complete the pending transaction, I would like to take this opportunity to thank every member of the Thermotite team for their many contributions to the history and success of our organization.”

Thermotite’s financial performance is currently reported under the Company’s Financial, Corporate & Other segment. Effective September 2024, the Thermotite business will be reported as an asset held for sale.

About Mattr

Mattr is a growth-oriented, global materials technology company broadly serving critical infrastructure markets, including transportation, communication, water management, energy and electrification. The Company operates through a network of fixed manufacturing facilities. Its two business segments, Composite Technologies and Connection Technologies, enable responsible renewal and enhancement of critical infrastructure while lowering risk.

For further information, please contact

Meghan MacEachern
VP, External Communications & ESG
Telephone: 437.341.1848
Email: meghan.maceachern@mattr.com
Website: www.mattr.com 

Source: Mattr Corp.

FAQ

What is the value of Mattr's sale of Thermotite do Brazil to Vallourec?

Mattr Corp. (MTTRF) has agreed to sell Thermotite do Brazil to Vallourec Tubular Solutions for US$17.5 million, or approximately CAD$24 million at current exchange rates.

When is the Thermotite sale expected to close?

While a specific date is not provided, Mattr anticipates that the transaction will be completed within the standard regulatory review time, subject to customary closing conditions and approvals.

How does the Thermotite sale align with Mattr's corporate strategy?

The sale aligns with Mattr's strategy to simplify its portfolio, lower volatility, and increase full-cycle margins. It marks the final divestment of Mattr's pipe coating business, allowing the company to focus on high-return growth in its remaining core businesses.

How will Mattr report Thermotite's financial performance after September 2024?

Effective September 2024, Mattr will report the Thermotite business as an asset held for sale, changing from its current reporting under the Financial, Corporate & Other segment.