On The Block

Residential building products maker ElkCorp has received interest from several third parties and is now considering a possible sale or merger to its suitors. UBS Investment Bank has been hired to assist ElkCorp’s management and board of directors in the process. Dallas, Texas-based ElkCorp trades on the New York Stock Exchange under ticker symbol ELK and comprises three platforms: roofing materials, general building products and deck and rail supplies. About 90% of the company’s consolidated revenues come from its roofing and building products divisions. ElkCorp generated a total of $218.1 million throughout the first quarter of its fiscal year 2007, which ended Sept. 30, 2007. That’s a slight increase from the $215.9 million it reported for Q1 2006. ElkCorp also reported long-term debt totaling $201.5 million.

Financial services company H&R Block Inc. (NYSE:HRB) says it is evaluating strategic alternatives for its Option One Mortgage Corp. unit. With more than $74 billion under management, Irvine, Calif.-headquartered Option One originates and acquires non-prime residential mortgage products, in addition to servicing and sub-servicing non-prime mortgage loans. Option One is slated to close 12 of its branch offices (representing one-third of its total branch locations) over the next four months “due to changes in the mortgage market,” according to H&R Block. Business from the closing branches will be transferred to other offices. In a prepared statement issued earlier this month, H&R Block Chairman and CEO Mark Ernst said a potential sell-off of Option One would allow H&R Block to further focus on its core businesses (providing tax, financial, accounting and business consulting services and products) and create long-term shareholder value. Goldman, Sachs & Co. has been tapped to run the process.

Gottschalks Inc. (NYSE:GOT) could be one of the next regional department store chains to be taken private. The Fresno, Calif.-based operator of 61 department stores and five specialty apparel outlets says it is evaluating various strategic alternatives, including the possibility of a sale or merger of the company. Almost half of Gottschalks’ stores are located in the state of California, while the rest can be found in Alaska, Idaho, Nevada, Oregon and Washington. The chain’s merchandise includes anything from vacuum cleaners to bikini-line trimmers to sets of high-end mixing bowls. Last year Gottschalks claimed net sales of $670.2 million, a 2.3% gain over 2004’s net sales of $654.7 million. Gottschalks was founded by German immigrant Emil Gottschalk as a Fresno-based dry goods store in 1904, and listed on the NYSE in 1986.

Specialty chemicals and materials company Grace Davison is weighing options for its Cincinnati-based washcoat product line. A washcoat is a liquid sealant that is used as a primer coating on bare wood before it is stained which protects the wood and reduces blotching. Grace Davison says the washcoat product line constitutes less than 5% of its annual sales. “Though our washcoat products enjoy a strong business position, with valuable technology, they are not part of our core product portfolio,” Grace Davison President Greg Poling said in a statement. “We are focused on determining the best option for the products, customers and employees of this business.” The company has set a target to complete the review of alternatives for the washcoat line by the end of Q1 2007. Grace Davison is an operating segment of global specialty chemicals provider W. R. Grace & Co. (NYSE:GRA).