TPG Buying 20% of Armstrong World Industries

NEW YORK (Reuters) – Private equity firm TPG said on Tuesday that it would buy up to 20 percent of building products company Armstrong World Industries Inc. (AWI.N)

TPG said it had agreed to buy 7 million Armstrong shares, about 12 percent of those outstanding, for $22.31 each from the company’s asbestos personal injury settlement trust. It will also buy economic interests in an additional 1.04 million shares from the trust, bringing the total value of the deal to around $180 million.

Shares of Armstrong were up 22 cents, or nearly 1 percent, at $25.87 in early New York Stock Exchange trade.

The trust is currently the company’s largest shareholder, with about 64 percent of Armstrong’s stock.

TPG said it expected the transaction to close in the next several weeks, after which the trust will hold an economic interest in slightly more than 50 percent of the shares outstanding.

After the deal with the trust closes, TPG plans to launch a tender offer for another 4.4 million shares from investors unaffiliated with the trust at the same price per share.

“We believe TPG’s involvement should make it easier for AWI to realize its objective to emerge from the downturn better positioned than it was when it entered, and to remain solidly profitable throughout the period,” Armstrong Chief Executive Michael Lockhart said in a statement.

(Reporting by Michael Erman; Editing by Lisa Von Ahn)