Solo Cup Co. is entering several new markets with its $140 million purchase of Clear Shield National Inc., a wholly owned subsidiary of Envirodyne Industries Inc.
Clear Shield, based in Wheeling, Ill., manufactures disposable plastic cutlery, drinking straws and custom dining kits for the institutional, food-service, convenience store and retail markets. These products, made at five facilities in the United States — Leominster, Mass.; Shreveport, La.; Twin Falls, Idaho; and two in Wheeling — will be folded into Solo's operations. The facilities employ 700.
Each of Clear Shield's products represents a new market for Solo, Solo Vice President Ronald Whaley said. He added that Solo does not have plans to consolidate operations.
``Their product lines complement ours very well and we believe this will mean enhanced opportunities for employees and customers of both businesses,'' Whaley said in a telephone interview.
``It is a great opportunity for Solo and Clear Shield both to grow significantly,'' he said.
Solo thermoforms cups, plates and bowls from high-impact polystyrene, PS foam, polypropylene and PET. The Highland Park, Ill., firm is a major supplier to retail markets. Solo had estimated thermoforming sales of $300 million last year, ranking second in Plastics News' 1998 survey of North American thermoformers.
This leaves Envirodyne with only its Viskase subsidiary, which makes biaxially oriented PP and single- and multilayer heat-shrinkable plastic bags for packaging and preserving fresh and processed meat, poultry and cheese. Viskase also manufactures cellulosic casings for processed meat. The firm operates 11 plants worldwide and employs 3,600.
For more than a year, Envirodyne has been selling its operating units and fighting hostile takeovers.
``Envirodyne is a highly leveraged company,'' said Envirodyne spokesman Gordon Donovan. ``It is selling its assets to pay down its debt. Clear Shield is a valuable asset and its sale should significantly reduce our senior indebtedness.''
Last year, Envirodyne sold its Viskase Ltd. oriented PS sheet extrusion and thermoforming operation in Sedgefield, England. That business, sold to Ivex Packaging Corp. in Lincolnshire, Ill., had sales of about $20 million.
Two months later, Envirodyne closed its Sandusky Plastics injection molding facility, moving the equipment to Clear Shield plants in Shreveport and Twin Falls. At the same time, the firm announced that its Viskase Corp. unit's PVC flexible film business was for sale. Linpac Plastics Ltd. of Knottingley, England, picked up that business, which included assets at Viskase's Aurora, Ohio, and Sedgefield plants. The PVC stretch and single-layer shrink films business had sales of $54.2 million.
Most recently, Oak Brook, Ill.-based Envirodyne sold its Sandusky Plastics Inc. thermoforming operation, also to help pay down debt. The unit had annual sales of about $30 million and thermoformed plastic promotional and vending cups and containers. The sale of the Sandusky, Ohio-based company to Whirley Industries Inc. was completed June 12.
After the Clear Shield sale is complete in late July, Envirodyne's senior indebtedness will drop from $524 million to less than $400 million, Donovan said.
In the midst of jettisoning its subsidiaries, Envirodyne thwarted two attempted takeovers from within the board of directors. One, involving the company's largest stockholder, resulted in a bitter proxy fight, which the company ultimately won.
Envirodyne's sales last year were about $611 million, with operating profit of about $30 million. With its recent purging of subsidiaries, Envirodyne will have sales of more than $450 million on a pro forma basis, Donovan said.
Envirodyne is publicly traded on Nasdaq under the symbol EDYN.