GWA International Limited, Australia’s leading supplier of building fixtures and fittings to households and commercial premises, announced Feb. 15 that it has entered into a binding agreement to sell the business and assets of Rover Mowers to MTD Products Australia Pty Ltd., which is part of MTD Products Inc. in Cleveland, Ohio.
The agreement will be completed on April 1, 2010, subject to finalizing the necessary steps to allow MTD Australia to carry on the business as a going concern.
GWA Managing Director Peter Crowley said, “The lawn mower industry has changed substantially in recent years, and Rover does not have the scale to be competitive in its own right. MTD is a major global business, and being a specialist in this sector, will provide a strong base for Rover to trade successfully in the future.”
Final proceeds to GWA from the sale are dependent on Rover’s working capital levels at completion, but are expected to be in the range of $10 million to $12 million.
As a consequence of entering into the binding agreement, the results for Rover will be shown as a discontinued operation in GWA’s interim financial report for the six months to Dec. 31, 2009, to be released on Feb. 16, 2010. A loss of $3.4 million after tax will be recorded to reflect trading results and asset write-downs as a consequence of the sale. This loss will not impact in any way on dividend payments, which will be maintained in line with GWA’s previously stated policy.
“Overall, this is a good result for Rover, which now has a new owner focused on the lawn care market,” said Crowley. “GWA shareholders will also benefit with the additional funds being available to focus on our core building fixtures and fittings businesses.”