Airgas, Inc., announced two important developments on July 2, 2007. The first was the completion the acquisition of Linde Gas USA LLC, and with it most of the U.S. packaged gas business of Linde AG (LIN.DE). The completed acquisition was effective at the close of business June 30, 2007. On July 2 Airgas also announced it reached a definitive agreement with its National Welders joint venture partners to exchange all preferred shares of National Welders Supply Company stock for Airgas common stock, which will transition the joint venture into a wholly owned subsidiary of Airgas.
Airgas paid $310 million in cash in the transaction to acquire the packaged gas operations of Linde Gas USA LLC. The acquisition involved 130 locations in 18 states, including branches, warehouses, packaged gas fill plants, and other operations involved in distributing packaged industrial and specialty gases and related equipment. In 2006, the business generated $346 million in revenue.
"We are pleased to welcome 1,400 associates and the packaged gas customers they serve," said Airgas Chairman and Chief Executive Officer Peter McCausland. "The packaged gas locations we have acquired fill in our network in a key corridor from Pittsburgh to Chicago, and in other important geographies in the eastern U.S., helping us serve customers more effectively."
Most associates and locations are joining seven regional companies and National Welders Supply Company, which will soon transition from a joint venture to a wholly owned subsidiary as announced separately. Two specialty gas facilities in Maumee and Valley View, OH, are joining the Airgas Specialty Gases national network, and some corporate functions based in Cleveland, OH, are joining Airgas corporate teams.
Since 1996, Airgas has owned 100% of the National Welders Supply Company common stock, with a 50% voting interest. The Turner family and other owners of National Welders preferred stock held the balance of the voting interest and received a 5% annual preferred stock dividend.
Under the definitive agreement reached, Airgas will exchange approximately 2.47 million shares of Airgas common stock for all preferred shares. Airgas will recognize a one-time after-tax charge of approximately $3 million in its quarter ended September 30, 2007 as a result of the transaction.
"I am very pleased to welcome National Welders associates to Airgas, even though I feel they have been a part of our family since 1996," said Airgas Chairman and Chief Executive Officer Peter McCausland. "I want to thank National Welders associates for all the contributions they have made in the past decade and I am sure they will continue to contribute to our success going forward."
"My father, James A. Turner, was a big supporter of both Peter McCausland and Airgas. He felt that he and Peter shared the philosophy of dedication to both customers and employees," said Judy Carpenter, chairman of the board and daughter of National Welders' founder. Mr. Turner also was a co-founder of Werco, Inc., which merged with U.S. Airgas in 1986, giving Airgas, Inc. the scale to go public.
"When he structured the joint venture, his goal was to allow National Welders to remain independent and yet retain the option to become part of Airgas. Since then, National Welders has doubled in sales and Airgas has become the industry leader. Under the leadership of Andy Cichocki, National Welders has retained the family atmosphere that my father was so passionate about. I know my father is looking down now with a great deal of satisfaction."
As a wholly owned subsidiary of Airgas, Andy Cichocki, president and chief executive officer of National Welders, will report directly to Mike Molinini, executive vice president and chief operating officer of Airgas, Inc. In other respects, National Welders will continue to operate with regional autonomy, very much like other Airgas regional companies do.