FARMINGDALE, N.Y. — P&F Industries announced in mid-October that Embassy Industries, a wholly owned subsidiary of the company, sold substantially all its non-real estate assets to a new Mestek Inc. division, Embassy Manufacturing Inc. Mestek, based in Westfield, Mass., formed Embassy Manufacturing for the purposes of the purchase.
Mestek manufactures and sells hydronic heating equipment as well as other HVAC and metal-forming products, including Beacon/ Morris, SpacePak, Hydrotherm, Smith Cast Iron Boilers and The Lockformer Co.
The total purchase price for the assets was $8 million subject to adjustments, plus the assumption of certain liabilities and obligations by Mestek.
P&F Industries noted that it did not sell Mestek its real estate, i.e., the factory that Embassy is currently occupying. The assets sold include machinery and equipment, accounts receivable, inventory and certain intangibles. P&F retained certain assets, including some cash and the real estate. P&F received net cash proceeds of $7.2 million at closing, with $800,000 held in escrow subject to post-closing adjustments and certain indemnification provisions. The purchase price represents a premium over the book value of the assets sold.
P&F has retained ownership of the manufacturing facility and has agreed to lease a substantial portion of the space to Mestek for at least the next six months. P&F intends to sell the real estate after Mestek vacates the premises. As a result of the transaction, the company has effectively exited the heating equipment business.
P& F Industries, through its two wholly owned operating subsidiaries, Countrywide Hardware and Florida Pneumatic Manufacturing Corp., manufactures and imports various residential hardware, as well as air-powered tools and accessories.