Custom injection molder Seda Specialty Packaging Corp. of Los Angeles will acquire American Safety Closure Corp. of Plattsburg, N.Y., an injection molded closure and jar maker. The combination of the two publicly held companies gives Seda production and distribution capabilities in the eastern United States, as well as ASC's line of high density polyethylene jars, to augment Seda's custom tubes and closures.
``ASC's line of closures is similar to ours, and the jars they produce give us another product line,'' said Ronald W. Johnson, vice president for finance at Seda. ``The eastern location is very important to us, although we have not decided what products will be produced where.''
Johnson said Seda, which has one manufacturing facility in Los Angeles, had $30 million in sales in 1994. ASC, with one facility in Plattsburg, had about $10 million in sales in 1994.
The deal, which gives ASC shareholders the option of accepting cash or shares of Seda stock, is valued at about $6 million, including Seda's purchase of some assets currently leased by ASC for $1.5 million.
Under the agreement, which is subject to approval of the Securities and Exchange Commission, the ASC public shareholders have the option of receiving $1.50 per share or one-eighth share of Seda stock for each share of ASC. ASC has about 3.04 million shares outstanding.
Controlling shareholders of ASC have agreed to exchange half of their shares for cash and half for Seda stock, according to Seda officials.
``This is an extremely favorable move for Seda that we expect will yield near- and long-term benefits,'' Seda President Shawn Sedaghat said in a news release. ``In addition to broadening our traditional tube and closure product mix with a line of single- and double-wall plastic jars - which should improve sales to our existing customers as well as provide many new business opportunities.''