Kennametal Completes J&L Sale
Kennametal Inc., a maker of metal-cutting tools and mining and construction equipment, said Thursday it completed the sale of J&L Industrial Supply to MSC Industrial Direct Co. Inc. for $349.5 million.
Kennametal’s balance sheet will show a pretax gain of $215 million to $225 million in the second quarter. Earnings per share will be impacted by $3.15 to $3.25. Net cash proceeds are expected to be between $220 million and $225 million.
The company also said the divestiture will affect sales guidance by about $28 million and earnings by 7 cents per share because the deal closed earlier than expected.
The company intends to use proceeds to fund future acquisitions, for stock buybacks in foreign subsidiaries, for continued buyback of Kennametal stock, and to pay down debt. It also said the sale completes its exit from owned distribution.
J&L is based in Southfield, Mich. The company had sales of $257.5 million last year.
MSC distributes more than half a million industrial products from about 2,100 suppliers. Net sales in fiscal 2005 were $1.1 billion.
Kennametal fell 70 cents to close at $56.78 on the New York Stock Exchange. MSC lost $1.33, or 3 percent, and closed at $44.40.
