Sealright Co. Inc. plans to spin off its flexible packaging business, forming a new public company, when Huhtamaki Oy completes its acquisition of the company's paperboard operations.
The new company will include flexible plastic packaging for condiments, dried fruit and other food, labels for beverages and other bottled products, and lidding, as well as Styrotech label-application equipment. Plants in Akron, Ohio, and San Leandro, Calif., and a sales office in Raleigh, N.C., will be maintained. The firm employs about 427 at those locations.
Of Sealright's $255 million in sales, $95 million is attributed to the flexible packaging business. It recorded a loss in 1997. On a pro forma basis, the company had tangible assets of about $50 million and no debt as of Dec. 31.
The transaction is scheduled to close during the third quarter. Sealright's board has retained the option of selling the flexible operations prior to closing the merger with Huhtamaki.
Sealright's shareholders will receive $11 in cash and one-half share of stock in the new corporation in exchange for each share of Sealright stock. Shares will be traded on Nasdaq.
A company name has not been selected. The Sealright name belongs with the paperboard operations sold to Huhtamaki, a Finnish packaging maker, according to David Burket, Sealright spokesman.
A year ago, Sealright sold its rigid plastic containers operations for $9 million in cash to Polytainers Inc., a corporation owned by Polytainers Ltd. of Toronto. The business, which made dairy packaging, had been unprofitable for years.
The Sealright paperboard-packaging business to be acquired by Huhtamaki employs 1,075 and consists of facilities in DeSoto, Kan.; Fulton, N.Y.; Los Angeles; and Brisbane, Australia.
Huhtamaki, based in Espoo, Finland, operates through two major divisions. Its Polarcup unit is a leading manufacturer of rigid paperboard and plastic food packaging in Europe and the Asia-Pacific region, and its Leaf operation is a major confectionery producer.
Huhtamaki had 1997 sales of $1.2 billion and employs 10,000 in 35 countries. The company is listed on the Helsinki, Finland, stock exchange.