Sought to rationalize business lines to focus on its largest and most strategic division, concrete-reinforcing steel products.
Brookwood advised Insteel on the divestiture of two of its non-core business units, including the company’s Industrial Wire business ($45M revenue).
Engagement Process and Outcomes
Divestiture Challenges – Relevant business unit divestiture issues included: (i) an industry landscape that offered a limited acquirer universe that consisted primarily of direct competitors; (ii) understanding replacement and overhead costs for certain services provided by corporate; (iii) competitive concerns related to the Company’s retained business units; and (iv) understanding and valuing the benefit to potential acquirors.
Comprehensive and Strategic Process – Brookwood executed a controlled and structured process that initially generated enough interest to allow Insteel to maintain negotiating leverage with a much larger competitor. Brookwood was able to manage the transaction without divulging key raw material pricing information and deferred the release of key customer information until the tail end of the transaction.
The Result – Brookwood successfully completed the sale of the assets and operations to the company’s primary competitor, Leggett & Platt, Inc. (NYSE: LEG), a $4 billion manufacturer of engineered components.