Exhibit 99.1
WALTER
INDUSTRIES TO ACQUIRE MUELLER WATER PRODUCTS, INC. FOR $1.91
BILLION
TAMPA, Fla., June 19 /PRNewswire-FirstCall/
-- Walter Industries, Inc. (NYSE:
WLT) announced today that it has entered
into a definitive agreement to purchase
Mueller Water Products, Inc. ("Mueller") a
privately held, leading supplier of
flow control products, for an aggregate
value of approximately $1.91 billion.
The consideration will consist of
approximately $860 million in cash and the
assumption of approximately $1.05 billion
in Mueller debt, based on Mueller's
balance sheet as of April 2, 2005, subject
to adjustments as provided in the
agreement. The acquisition complements the
Company's U.S. Pipe subsidiary,
creating a major water infrastructure and
piping systems company with leading
business positions, significant scale, and
excellent prospects for growth.
The transaction is expected to be accretive
by $0.20 to $0.24 per fully diluted
share in the first full year after closing;
further, the estimated earnings
accretion excludes approximately $25 to $35
million of ongoing annual operating
synergies that are expected to be achieved
within 24 months of the businesses
being combined. Upon closing, U.S. Pipe
will, as a legal matter, become part of
Mueller, creating a separate wholly-owned
public reporting subsidiary that will
have approximately $1.6 billion in
revenues.
By establishing a separate reporting
entity, the Company is creating a
subsidiary with meaningful scale,
increasing the Company's flexibility to pursue
potential alternatives related to value
creation at its other existing
businesses. These include Jim Walter
Resources, the Company's strong performing
coal and natural gas unit. The Company
recognizes the importance of capitalizing
on opportunities to take advantage of
robust coal market conditions at the best
time and in the best manner to serve the
interests of its shareholders.
As announced in February of this year, Don
DeFosset, Chairman and CEO of Walter
Industries plans to retire. He has agreed
to remain as Chairman and CEO until
his successor has joined the Company.
DeFosset will lead the integration process
and assist in a smooth transition of
leadership.
"Today's announcement is another important
milestone in our shareholder value
creation program and a defining event in
the development of our water systems
business," DeFosset said. "We have been
tracking Mueller's growth and
compatibility with U.S. Pipe for some time,
and we are excited to have the
opportunity to bring these businesses
together. The complementary fit of
Mueller's water infrastructure and U.S.
Pipe's water transmission business makes
us ideal partners, well positioned to
benefit from increased water
infrastructure spending in North America."
Dale B. Smith, Chief Executive
Officer of Mueller, and Ray Torok,
President of U.S. Pipe, will continue to be
responsible for their respective businesses
and will work together to achieve
synergies under the leadership of DeFosset
and his successor.
<PAGE>
Thompson Dean, Chairman of Mueller and
Managing Partner of DLJ Merchant Banking
said, "We are extremely pleased at this
outcome for the DLJ Merchant Banking
funds as well as the opportunities that
this transaction creates for Walter
Industries and Mueller going forward."
Based in Decatur, Ill., Mueller is a
leading North American full line supplier
of water infrastructure and flow control
products for use in water distr
