USG to sell building products distribution unit for $670 million

(Reuters) - Building supplies maker USG Corp said it would sell its distribution unit, L&W Supply Corp, to roofing supplier ABC Supply Co Inc for $670 million (512.56 million pounds), as the company looks to cut debt and focus on its high-return gypsum and ceiling businesses.

The all-cash deal is expected to be completed before the end of 2016, the companies said on Monday.

L&W Supply distributes gypsum wallboard and other building materials in the United States.

The distribution business accounted for about 38 percent of Chicago-based USG's total sales of $3.78 billion in 2015.

Beloit, Wisconsin-based ABC Supply, which also distributes siding and windows, said the acquisition would help it expand in the business of supplying building interiors.

USG had $1.68 billion of long-term debt as of June 30, according to a recent quarterly filing.

J.P. Morgan Securities LLC and Goldman Sachs & Co are financial advisers to USG, while RBC Capital Markets and Deutsche Bank are advising ABC Supply.

(Reporting by Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila)