Wheatland Tube In Talks To Be Sold

Jan. 26, 2006
Wheatland Tube Co., Collingswood, N.J., is negotiating with a private-equity firm for a potential sale.

Wheatland Tube Co., Collingswood, N.J., is negotiating with a private-equity firm for a potential sale.

Now in the due diligence phase of the negotiations, Wheatland Tube could be sold sometime in the first quarter, if the deal closes, said Mark Magno, the company’s vice president of marketing, electrical and national accounts. He stressed that Wheatland Tube has not been sold, despite some reports in the industry. "It was really done to help fuel our next round of growth for the company, and senior management will stay firmly in place," he said.

The private equity firm that Wheatland Tube is talking with stepped forward after Wheatland Tube’s board of directors and shareholders voted to explore getting a strategic equity partner, said Magno. Wheatland Tube is not disclosing the name of the firm, but said the financial firm does not operate any businesses in the steel industry.

If the deal goes through, Magno said all senior managers would remain "firmly in place," and that selected shareholders and senior management would reinvest back into the company so, "Our goals and our private equity partner’s goals are in alignment."

Wheatland Tube has approximately 2,000 employees at its headquarters in Collingswood, N.J.; its plumbing and electrical fittings operations in Cambridge, Ohio, and Houston; and other locations in Sharon, Pa.; Wheatland, Pa.; Warren, Ohio; Chicago; and Little Rock, Ark.

Like other steel manufacturers, Wheatland Tube has faced challenges recently, and it laid off about 200 workers in the last year. Magno says that layoffs were not unusual for steel manufacturers, which saw a slowdown in steel product production in 2005.

"2004 was a strong market for our steel products and 2005 was a slower market for our steel products," he said. "Like any manufacturer, we try to balance our production levels and production schedules with our order books to find a very good equilibrium. Frankly, our order books until recently were slower and have recently picked up. That’s across the board. I don’t think that’s unusual for any manufacturer in the steel business right now."

Steel manufacturers have struggled to compete with the increase in low-cost imports. Magno said Wheatland Tube was disappointed by President Bush’s decision in late December to not grant relief to the steel industry and impose a quota to stem a sudden surge of Chinese steel pipe imports. Low-cost imports have impacted Wheatland Tube and other steel manufacturers primarily in the standard pipe market, which is used in sprinkler systems, air conditioning and fencing, but not steel conduit markets. “But everybody in one way or another is affected by it.

Wheatland Tube’s roots date back to 1877, when John Maneely, an enterprising Irish immigrant, launched a Philadelphia-based pipe distribution business to sell pipe, valves and fittings. Today, John Maneely Co. (JMC) serves as the parent company for both Wheatland Tube Co. and Seminole Tubular Products.