Masco to Sell Furniture Unit for $1 Billion : Acquisitions: The buyer is a new company formed by Morgan Stanley Capital Partners.
Masco Corp. said Wednesday that it agreed to sell its Masco Home Furnishings Group for more than $1.1 billion to a new company formed by Morgan Stanley Capital Partners.
Masco will receive more than $1 billion in cash, as well as options and warrants to invest in the acquiring company. Morgan Stanley Capital Partners is the private equity division of Morgan Stanley Group Inc.
“The divestiture of our home furnishings businesses will enable us to better focus on our traditional home improvement and building products businesses, which have historically achieved outstanding operating performance,” said Richard A. Manoogian, chairman of Masco.
Masco’s Home Furnishings Group includes such well-known brands as Henredon, Drexel Heritage, Lexington, Universal, Berkline, Bench Craft, Maitland-Smith and Robert Allen Fabrics. Masco acquired the brands over the last nine years.
The group represents an investment of about $1.7 billion on Masco Corp.'s balance sheet, and Masco said it will record a non-cash charge of about $600 million in its fourth quarter to reflect the sale. Masco Home Furnishings had an operating profit of about $80 million on sales of about $1.9 billion in 1994.
The deal is expected to close in about 60 days.
Masco, which is based in this Michigan city, makes home improvement, building and home furnishings products.
Morgan Stanley Capital Partners, through its private equity investments funds, has invested $2.6 billion in more than 50 private transactions in companies in numerous industries.
Masco’s stock closed at $31, up 87.5 cents, on the New York Stock Exchange on Wednesday.