Navistar International Corp. said it reached a definitive agreement to sell a majority interest in its Columbus Plastics Operation to Rymac Mortgage Investment Corp., a publicly held real estate investment trust based in Steubenville, Ohio, for $38 million in stocks and notes. In May, Chicago-based Navistar and Rymac announced a preliminary agreement on the sale of Columbus Plastics, a molder of SMC components for the commercial truck industry and for Yamaha Wave Runner watercraft. The deal, which is subject to approval by Rymac stockholders, is scheduled to be completed by year's end.
Rymac, which has liquidated its mortgage investments, is also in the process of converting from a REIT organization to a manufacturing corporation. The company is planning to move its headquarters to Columbus, Ohio, where the plastics operation is based, and will likely adopt a new name, said Richard Conte, Rymac chairman and chief executive officer.
Under terms of the agreement, Rymac will acquire the assets of Columbus Plastics for a $25.5 million note and 4.3 million shares of newly issued Rymac common stock. Navistar, as 45 percent owner of Rymac common stock, will benefit by any potential increase in the share price.
As part of the deal, Rymac gets an annually renewable five-year contract with Navistar to supply its SMC components, he said.
Columbus Plastics, which had sales of $65 million for the year ended October 1995, was opened by Navistar in 1981 and employs 480. Rymac and Navistar said all employees will remain with Columbus Plastics and contracts with Local 1471 of the Internation-al Association of Machinists and Aerospace Workers ``are expected to essentially remain in place.''
Conte is looking for sales in fiscal 1996 to decline to about $60 million in the wake of a softer truck market. But he also plans to expand the business in the auto industry and with new, industrial-market SMC applications.
The sale of Columbus Plastics will allow Navistar to focus on its truck and bus assembly and diesel engine businesses, said John R. Horne, chairman, president and chief executive officer.
The deal ``will focus Navistar's financial flexibility on its core businesses and will free up re-sources to pursue strategies to in-troduce new products, streamline our manufacturing operations and reduce complexity,'' he said.
