LONDON — The planned $178 million purchase of American Filtrona Corp. by Bunzl plc ends a complex tussle over the future of the U.S. firm between different factions in the Bunzl family.
American Filtrona of Richmond, Va., has two trading divisions: The $120 million plastics business extrudes thermoplastic resins for profiles, pipe and sheet, and the $73 million bonded fiber business manufactures cigarette filters and ink pen reservoirs.U.S. members and trusts for members of the Bunzl family have owned stakes totaling 46 percent in the company, whose shares trade on the Nasdaq market system.
Early this year, WBT Holdings LLC of Georgia — owned by trusts for members of the family of the late Walter Bunzl — offered to buy Filtrona with a leveraged buyout.
It had agreed, if successful, to sell the bonded fiber business for about $72 million to London-based Bunzl plc, a publicly traded firm founded by, but now separate from, the Bunzl family.
WBT Holdings was opposed by Walter Bunzl's surviving brother Rudolph, and trustees of Rudolph's family. They preferred to sell off American Filtrona, according to Chairman Anthony Habgood of Bunzl plc.
But by late June, WBT Holdings pulled out of the deal. American Filtrona directors immediately began to explore alternatives, including sale of the company.
Bunzl plc stepped in, offering to buy all of Filtrona. The firms signed a letter of intent in early July, after Bunzl family shareholders agreed to vote for the sale.
``AFC is an excellent fit with Bunzl and this acquisition is in the best interests of both companies,'' Habgood said.
The deal, which still is subject to regulatory approvals, should be completed by October or early November.
American Filtrona, which has seven plastics plants across North America, made pretax profit of $19.4 million on overall 1996 sales of $193 million.
Bunzl plc is a leading molder of polypropylene and low density polyethylene protection caps and plugs for the engineering and oil industries.
In the United States, it runs Alliance Plastics of Erie, Pa., a manufacturer of caps and plugs, and automotive under-the-hood component producer Webster Plastics of Rochester, N.Y., a Tier 1 supplier for General Motors.
Bunzl also makes food and cosmetic packaging and a range of garden products and housewares at plants in the United Kingdom, United States, Brazil and the Netherlands.
Bunzl extended its cap and plug business in the United States in January when it bought two California firms, Thinking Plastics Inc. of Santa Fe Springs, Calif., and its associate company MDX Plastics Inc. They were purchased for about $4.3 million. Those companies also mold proprietary plastic industrial parts for the U.S. furniture and equipment market.