06:24 AM EDT, 04/22/2024 (MT Newswires) -- Quanex Building Products ( NX ) agreed to acquire UK-based door and window supplier Tyman in a cash-and-stock deal with an enterprise value of about $1.1 billion, the companies said in separate statements Monday.

Under the terms, investors of Tyman will have the option to receive a combination of 240 pence ($2.99) in cash and 0.05715 shares of Quanex for each share they hold. The British firm's shareholders will also have the option to receive 0.14288 shares of Quanex stock per Tyman share, as an alternative consideration.

The transaction values Tyman at about 788 million pounds based on Quanex's closing share price on Friday of $34.64, the company said. Tyman's stockholders will also be entitled to receive the final dividend payment disclosed in March.

The deal, which requires approval from regulators as well as from both companies' shareholders, is expected to close in the second half. Teleios, which owns 16.4% of Tyman, has voted in favor of the transaction. Following completion, Tyman investors will own between 30% and 32% of Quanex.

"With significantly enhanced scale, we are looking forward to fully optimizing our portfolio of products and assets," Quanex Chief Executive George Wilson said in a statement. "As one company, we will have an enhanced financial profile grounded in attractive margins, strong free cash flow and a healthy balance sheet, that will enable us to invest in organic and inorganic growth opportunities to deliver superior returns for investors."

The maker of building components anticipates the acquisition to expand its geographic presence, product offering and move it close to its revenue target of $2 billion. The deal is estimated to be "meaningfully" accretive to earnings in the first full year of completion and generate annual pretax cost synergies of roughly $30 million within two years.

"This transformative and complementary transaction will strengthen the enlarged business for the benefit of all our customers, employees and other stakeholders," said Tyman Chairman Nicky Hartery. "In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximizing value for Tyman shareholders."

The combined company, which will be led by Wilson, will have its headquarters at Quanex's current head office in Texas. The company currently does not plan to shut down any of Tyman's manufacturing facilities.