In separate deals, a Blackstone Group-sponsored fund has agreed to acquire wallcovering businesses from Borden Inc. and Collins & Aikman Corp.
Both transactions are expected to close in the first quarter of 1998.
As part of a deal for Borden Decorative Products Holdings Inc., the Blackstone fund will buy Vernon Plastics in Haverhill, Mass. The producer of calendered, flexible vinyl film employs about 250, generates annual sales of more than $50 million and has been a Borden unit since 1974.
Vernon Plastics makes three-and four-ply laminates for banner and billboard fabrics, supported products for upholstery, liners for pools and industrial applications, and film for bookbinding and sheeting products. The Haverhill facility occupies 175,000 square feet, operates two calendering lines and, in November, began ramping up production on a newly installed Gloucester 102-inch-wide extrusion coater.
Columbus, Ohio-based Borden said Nov. 6 it signed a definitive agreement to sell its residential wallcoverings business and Vernon Plastics to Blackstone Capital Partners III Merchant Banking Fund LP in New York.
The business is valued at about $320 million with the fund paying $310 million in cash and Borden retaining an 11 percent equity interest. Closing is scheduled for the first quarter of 1998.
Borden Decorative Products Holdings Inc. reported sales of about $375 million and includes wallcovering units Borden Decorative Products Ltd. in the United Kingdom and Sunworthy Wallcoverings in North America. The United Kingdom operations employ 1,600 at five plants, and market products under the brand names Crown, Shand Kydd and Storeys.
North American production is in Brampton, Ontario, employing 550 and distributing under the Sunworthy, Borden Home, Foremost, Westmount and Birge names.
Borden acquired the Crown and Sunworthy businesses in 1985 and the Storeys line in 1988. On a sales basis, the United Kingdom operations in vinyl-coated products are slightly larger than those in North America.
Borden Inc. plans to use the proceeds to invest in ``significant opportunities within our family of companies,'' C. Robert Kidder, chairman and chief executive officer, said in a release. Borden companies employ about 15,500. New York investment firm Kohlberg Kravis Roberts & Co. has owned Borden since 1995.
In the other deal, Collins & Aikman said Nov. 5 it has agreed to sell its Imperial Wallcoverings business to the same Blackstone fund for $58 million in cash, subject to a cash-flow adjustment on closing and an option on a ``small amount of common stock,'' according to C&A.
C&A estimated the unit had an after-tax value of $90 million to $97 million and said it will record a $21.1 million loss relating to the transaction for the quarter ended Sept. 27.
The Charlotte, N.C.-based firm's financial statements have carried Imperial as a discontinued business since April 1996.
``We thoroughly explored all alternatives, including a spin-off to C&A shareholders,'' Thomas E. Hannah, C&A chief executive officer, said in a news release. The business ``continues to experience substantial operating losses in a difficult industry environment.''
Imperial is in Cleveland. A Hammond, Ind., site closed in 1996.
C&A employs more than 13,000 and has focused on its Tier 1 automotive interior trim business, Hannah said. He referred to Imperial as ``our last major nonautomotive subsidiary.'' Affiliates of Blackstone own about 40 percent of C&A.
