AZZ Inc. (NYSE:AZZ), a provider of metal coating services, welding solutions, specialty electrical equipment and highly engineered services, on Feb. 11 announced that it has entered into an agreement to divest its Nuclear Logistics LLC operating business unit to Paragon Energy Solutions LLC. Terms of the transaction were not disclosed, and are subject to customary closing terms and conditions, including obtaining consents on certain governmental contracts. The transaction is expected to close by the end of the fourth quarter of AZZ’s fiscal year 2020. Upon closing of the transaction, the company expects to record a one-time, non-cash charge related to the divestiture of NLI which would be moderately offset by the realization of deal-related tax benefits to the current fiscal year 2020.
“We are pleased to have reached an agreement to divest the NLI business with Paragon,” said Tom Ferguson, CEO of Fort Worth-based AZZ. “I am convinced that Paragon will be a great partner to the NLI customer base, as well as a good employer for NLI’s work force. We were successful in improving NLI operational performance, but based upon a strategic review of our assets and product portfolio, we believe the divestment of NLI and redeployment of capital into our metal coatings business segment creates greater growth opportunities for AZZ. We will work with the Paragon team to affect a seamless transition and to ensure NLI’s customers receive the industry-leading service they deserve.
“I anticipate our fiscal year 2020 operating results will remain within the range of the previously issued revenue and earnings guidance, without the effects of the potential non-cash charge and related tax benefits. Additionally, we are maintaining our recently issued guidance for fiscal year 2021 and will provide an update, if necessary,” he said.