AZZ Inc. announced that it has completed the divestiture of its AZZ SMS LLC operating business unit to Mid-State Machine and Fabricating Corporation, a privately held company based in Lakeland, Florida. Mid-State acquired the SMS business and assumed a 26,155 square foot facility located in St. Petersburg, Florida. Terms of the transaction were not disclosed and are subject to customary terms and conditions.
SMS was acquired by AZZ in 2013 as part of the acquisition of Aquilex Specialty Repair and Overhaul LLC. As part of its recently disclosed earnings announcement, AZZ recorded a non-cash charge related to the divestiture of SMS to fiscal year 2021 second quarter, which ended on August 31, 2020. AZZ expects a nominal revenue impact of approximately $35 million and anticipates the deal to be cash positive for the company.
Tom Ferguson, Chief Executive Officer of AZZ, commented, "The divesture of SMS is in line with our strategic plan to restructure our portfolio to focus on growth within our core businesses. We are pleased to have reached an agreement with Mid-State to acquire SMS, while maintaining uninterrupted service to the customers of SMS, and employment for the SMS work force. We are focused on activities that will drive higher returns on invested capital within our core businesses for long-term margin expansion and growth."