After years of financial and legal ups and downs, an international food packaging company has decided that an exit from plastics altogether is in order, to regain its financial standing. Viskase Cos. Inc. announced Jan. 17 that it has retained the brokerage firm of Donaldson, Lufkin and Jenrette to navigate the sale of its final North American plastics business, a barrier and nonbarrier shrink film business.
The business up for sale includes production facilities in Centerville, Iowa; Pauls Valley, Okla.; Swansea, Wales; and Sao Paulo, Brazil. One plastics casing business will remain in Beauvais, France, said Ed Gustafson, president and chief executive officer of Chicago-based Viskase.
Gustafson said he hopes to have a deal on the table by late spring.
In a telephone interview, Gustafson said a departure from the plastics businesses is the best thing for the company, which, during the past several years, has been selling off various plastics packaging businesses one by one.
"This is something that is a good business, and we didn't want to sell it," he said. "We just have a need to clean up the balance sheet and it dictates selling the [plastics] business."
Gustafson said the company is still trying to recover from its $425 million debt load. Publicly held Viskase reported sales of $409.2 million last year.
What will be left of the company, according to Gustafson, is the production of cellulose meat-casings products made from wood pulp.
"I think [the sale] will put us in a position to enable us to aggressively pursue the casings business, which is still a growth business and one that we have new technology [for] that will greatly reduce our costs," Gustafson said. "Frankly, we have two very good businesses — we simply don't have the financial strength to support both of them. We decided to focus on the cellulose side."
Prior to September 1998, Viskase was a subsidiary of Envirodyne Industries Inc.
However, Viskase currently stands alone, following a string of deals that sold off pieces of the company.
In 1997, Viskase Corp.'s PVC film business was acquired by Linpac Plastics Ltd. of Knottingley, England. That same year, Ivex Packaging Corp. of Lincolnshire, Ill., purchased Viskase Ltd., an oriented polystyrene sheet thermoforming and extrusion business in Sedgefield, England. The following year, Solo Cup Co. bought Clear Shield National Inc.
The last three years also saw Envirodyne rejecting acquisitions by at least three companies that have made offers to buy out the company's debt, and winning a $102.4 million patent-infringement settlement against American National Can Co. in August 1998.