Rheem Manufacturing Being Acquired By MLX Corp.
TROY, Mich. (AP) _ MLX Corp. said it will acquire Rheem Manufacturing Co., the largest U.S. maker of residential furnaces and water heaters, for $825 million in cash and MLX common stock.
Rheem, which also is the second-largest U.S. maker of residential central air conditioning systems, markets its products under the brand names Rheem, Ruud, Raypak and Richmond and had sales of about $725 million in 1986.
MLX said it will form a new subsidiary that will merge with PACE Industries Inc., parent company of Rheem. MLX Chairman William P. Panny said Monday that PACE has agreed to divest any other operations before the merger is completed in December.
PACE and Rheem are based in New York City.
Troy-based MLX owns MLX Refrigeration and Air Conditioning Distribution Group, a distributor of commercial refrigeration and air conditioning components, and MLX Specialty Friction Materials Group, which makes high- energy friction materials for aircraft and industrial machinery, Panny said.
MLX will issue about 9.5 million shares of common stock in connection with the acquisition, Panny said.
In 1986, MLX lost $1.2 million, or 11 cents a share, on sales of $83.3 million, not including its acquisition of a distribution subsidiary in late 1986, according to Bob Perkins, MLX chief financial officer.
With the acquisition included, MLX earned $17,000 on sales of $356.6 million, he said.
For the first half of 1987, MLX lost $785,000, or 5 cents a share, on sales of $177.9 million, Perkins said.