The parent company of Natvar Co. is considering selling the medical tubing manufacturer for at least $25 million to focus on expanding its larger businesses.
Natvar's parent, High Voltage Engineering Corp., said it questions whether it has the resources to grow its medical tubing business, and is exploring whether the company would fit better with a new owner.
The sale would put a significant amount of the custom medical tubing business in play. Natvar said it does more than $16 million worth of business from its headquarters in Clayton, N.C., which has more than 10 extrusion lines, and from a smaller plant in Lakewood, Colo., which runs three lines.
But a High Voltage executive stressed that the firm may decide to keep Natvar and grow it internally.
``We have explored whether that business could grow faster as part of another business,'' said Joseph McHugh, chief financial officer of Wakefield, Mass.-based HV. ``It's one of our smallest businesses, so we decided to explore the market to see what the interest level was.''
HV wants to grow its other businesses, and ``just figured we couldn't do everything we wanted to,'' McHugh said in a Feb. 1 telephone interview. ``We had some people approach us. They saw the same opportunities.''
McHugh declined to talk about the offers but said the market value of Natvar is at least $25 million. He said they hoped to make a decision in 60 days.
``If we don't get market value — what we believe it is worth — we will continue to grow that business,'' he said. ``It's been one of our better performers this year.''
HV had $234 million in sales for the fiscal year ended in April. It has since acquired two firms in divisions unrelated to plastics and now has annual sales of about $275 million, McHugh said.
Its largest business sells drives for motors, and its other divisions make surface analysis equipment, power connectors, monitoring instruments and particle accelerator systems.
HV reported a loss of $12.7 million for the fiscal year ended in April, mainly from restructuring some debt, McHugh said. It also saw sales of motor drives fall in the semiconductor and Asian markets, he said.
Natvar had sales of $7.9 million, with operating profit of $1.2 million, for the six months from April to October, HV reported in filings to the Securities and Exchange Commission. HV has not disclosed the possible sale to the SEC, but has told customers, the firm said.