Spartech Corporation Announces Agreement to Purchase Three Divisions of VPI
September 01 2004 - 10:03AM
PR Newswire (US)
Spartech Corporation Announces Agreement to Purchase Three
Divisions of VPI ST. LOUIS, Sept. 1 /PRNewswire-FirstCall/ --
Spartech Corporation (NYSE:SEH) announced today that it has entered
into an agreement to acquire substantially all of the assets of
three divisions of VPI, based in Sheboygan, WI. The operations
being acquired include (1) The Sheet Products Division, a two plant
custom extruded sheet manufacturer serving the growing graphic
arts, medical packaging, and specialty retail markets; (2) The
Contract Manufacturing Division, a one plant provider of non-carpet
flooring and sound barrier products to the transportation industry;
and (3) The Film and Converting Division, also a one plant
operation, which calenders, prints and laminates products for
distribution to various markets including the Medical and
Recreation & Leisure industries. Spartech's Chairman, President
and CEO Bradley B. Buechler stated, "We are very enthusiastic about
adding VPI's unique product offerings and strong operating
personnel to our growing Spartech team. Sales within the three
divisions being acquired are currently running at an annual rate of
approximately $110 million ...while operating at a combined
capacity utilization rate of less than 65%. This available capacity
will allow us flexibility in serving our current customers, while
also giving us more room for volume expansion. Additional benefits
from the combination of VPI's three divisions with our Spartech
Plastics and Spartech Polycom operations include: (A) The
broadening of our technical and marketing knowledge which should
enable us to better serve certain markets in which we have a
limited position in today, namely the growing medical and graphic
arts industries; (B) The enhancement of our supply chain management
position for select raw materials; and (C) The addition of several
new specialty product offerings for markets we currently serve.
These benefits, along with certain cost savings anticipated from
the integration of our combined production and sales efforts, will
offer new opportunities for us to add value to all Spartech
customers and shareholders." VPI President Greg Mickelson stated,
"We are pleased to have found, in Spartech, a company that is such
a good match for the future needs of these divisions, their
employees and their customers." Mr. Buechler further stated, "The
cash price for this acquisition is approximately $83.5 million
which will be financed from the proceeds of a $150 million private
placement of unsecured notes at 5.54%. We have received commitment
from the seven insurance companies participating in the transaction
to fund the notes on or before September 15, 2004. Current plans
call for the acquisition to close on October 1, 2004, subject to
customary consents and approvals. VPI's Sheet Products Division
will become part of our Custom Sheet & Rollstock Group, while
their Contract Manufacturing and Film & Converting Divisions
will be integrated into our Color & Specialty Compounds
Segment. We expect to retain practically all of the personnel in
these three divisions following the completion of the transaction
and look forward to a smooth integration as VPI becomes part of the
Spartech 'Family of Plastic Processing Companies'." Spartech
Corporation is a leading producer of engineered thermoplastic
materials, polymeric compounds, and molded & profile products,
which has 48 facilities located throughout the United States,
Canada, Mexico, and Europe, with annual production and sales of
approximately 1.6 billion pounds and $1 billion, respectively. Safe
Harbor For Forward-Looking Statements Statements contained herein
which are not historical facts are forward- looking statements
within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934 which are intended to be covered by the safe
harbors created thereby. For a summary of important facts which
could cause the Company's actual results to differ materially from
those included in, or inferred by, the forward-looking statements,
refer to the Company's Form 10-K for the fiscal year ended November
1, 2003, which is on file with the Securities and Exchange
Commission. DATASOURCE: Spartech Corporation CONTACT: Bradley B.
Buechler, Chairman, President and Chief Executive Officer,
+1-314-721-4242, or Randy C. Martin, Executive Vice President,
Corporate Development and CFO, +1-314-721-4242, both of Spartech
Corporation Web site: http://www.spartech.com/
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