TORONTO - A family-held, diverse firm plans to be the newest entrant in oriented polypropylene film by acquiring QPF Inc., commonly known as the Quantum Performance Films business of U.S. Industries Inc. of Iselin, N.J. Hood Cos. of Hattiesburg, Miss., agreed to pay $43.2 million in cash for QPF, which operates a three-line OPP film plant in Streamwood, Ill. QPF had operating profit of about $3.5 million on sales of $37 million for the nine months ended June 30. U.S. Industries expects to net a small, undisclosed gain on the sale. Officials hope to conclude the deal in December.
Hood's only current plastics business does polyethylene film extrusion and conversion at plants in Marengo, Ill., St. Paul, Minn., and Grand Forks, N.D. It makes bags, bubble cushioning and monolayer, coextruded and laminated packaging films. Hood's Southern Bag Corp. subsidiary, a Madison, Miss., producer of multiwall paper bags, bought the plastics business early this year from NV Koninklijke KNP BT of Amsterdam, the Netherlands. The former Sengewald USA Inc. business is now the Hood Flexible Packaging Division of Southern Bag.
Hood Chief Financial Officer Larry Davis cited growth potential and good management and technology as key reasons his firm wants to buy QPF. The acquisition-minded company used these criteria when it expanded its roofing products and lumber businesses in the past few years.
Hood plans to keep QPF's current executives and wants to expand QPF, but Davis could not provide any details on its expansion strategy.
For about 18 months competitors have suggested U.S. Industries wanted to sell its OPP films business. U.S. Industries would not confirm these intentions, but spokeswoman Diana Burton said in a Nov. 12 telephone interview that the conglomerate has not considered OPP films a core business since mid-1995, when Hanson plc spun off U.S. Industries.
Burton said U.S. Industries does not list Leon Plastics as a strategic business. Leon is a custom injection molder in Grand Rapids, Mich., that makes auto interior trim. She said U.S. Industries' core businesses include Jacuzzi Inc., Ames Lawn & Garden Tools Co., toymaker Ertl Co. Inc., vacuum cleaner producer Rexair, Lighting Corp. of America and EJ Footwear.
Burton said her firm will look for a buyer of QPF's uncompleted plant in Salisbury, N.C., which is not included in the agreement with Hood. Work on the 254,000-square-foot building, which was slated to be an OPP film plant, was stopped in 1990. Davis said Hood might ``look at the plant.''
QPF's Streamwood plant employs about 240 and processed 47 million pounds of resin last year, according to Plastics News' recent film and sheet survey.
Davis did not disclose any sales data for Hood. Its Atlas Roofing Corp. unit makes roofing and foam board, and Hood Industries Inc. produces lumber and plywood. Its majority owner is Warren Hood Jr. of Hattiesburg, Miss. QPF's sale would be the second major ownership change in OPP film in less than a year. AEP Industries Inc. of South Hackensack, N.J., recently entered OPP film production when it bought Borden Inc.'s packaging business. Several OPP film producers are expanding capacity to supply a fast-growing market.