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April 29, 1996 02:00 AM

ASAHI TO FUND EXPANSION WITH SHARE OFFER

Michael Lauzon
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    Asahi America Inc. plans an initial public share offer by mid-May to help fund expansion of its extruded pipe and injection molded fittings operations. The Malden, Mass., firm expects to offer 1.16 million common shares on Nasdaq at $7-$9 per share, said President Bud Lewis. Underwriters for the offering are Fechtor, Detwiler & Co. Inc. of Boston and Daiwa Secur-ities America Inc. of New York.

    Lewis said Asahi America plans to add a new extruder in Malden and install its second injection press with about 500 tons of clamping force before the end of 1997.

    The $2.5 million expansion includes adding a computer numerically controlled center for making metal parts and boosting plant space to 96,000 square feet by acquiring an adjacent 20,000-square-foot facility and building a 16,000-square-foot addition connecting the two buildings.

    Asahi America makes pipe for industrial, municipal, construction and plumbing markets on three extrusion lines.

    One of its major product lines is dual-contained pipe extruded from high density polyethylene, polypropylene and polyvinylidene difluoride for transmission of toxic materials and hazardous waste.

    The company also molds plastic fittings and manufactures valves, pneumatic controls and similar products. Manufacturing accounts for about 40 percent of sales and is growing, said Lewis.

    Asahi America distributes valves and other fluid-handling products for part owners Asahi Yukizai Kokyo Co. of Nobeoka, Japan, and Nichimen Corp. of Tokyo, to more than 400 distributors. The Malden firm's sales last year were about $35 million and profit was $1.6 million. Extrusion sales were $12.4 million.

    Increasingly stringent federal Environmental Protection Agency regulations on hazardous waste transmission are boosting de-mand for dual-contained pipe and similar products. Asahi America will use some of the funds raised from the IPO to develop products and possibly bankroll acquisitions.

    Lewis owns 51 percent of Asahi America, which started in 1974 as a distributor. Asahi Yukizai and Nichimen own the rest. The Japanese firms bought equity interest in the company about five years ago.

    Lewis said the IPO underwriters have an option to sell 15 percent more shares than the 1.16 million planned for the issue. If all the IPO and overalloted shares are sold, the public will hold 40 percent of Asahi America.

    Lewis's interest would be diluted to 30 percent, the same stake Asahi Yukizai and Nichimen would hold. Asahi America will sell 1 million of the shares and Lewis and the two Japanese partners will sell the other 160,000.

    Asahi America bought competitor Poly-Flowlines Co. of Sylmar, Calif., two years ago and moved the operation to Massachusetts. It employs 110 at Malden and in Canton, Mass., and may add as many as 40 jobs as it expands.

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