U.S. Industries Inc. is selling its Diversified business unit rather than spinning it off as a public company. USI agreed to sell the business to Vectura Holdings LLC, a portfolio company run by Citicorp Venture Capital of New York. Vectura will pay about $600 million in the deal, which is expected to be finished in February. USI spokeswoman Diana Burton estimates Diversified's sales at $800 million to $900 million annually.
The Diversified unit includes custom injection molder Leon Plastics Inc. of Grand Rapids, Mich., which had sales of $55.9 million for the year ended Oct. 1, 1998. Leon molds interior auto parts, Burton said in a telephone interview from USI's Iselin, N.J., headquarters.
Other operations in the sale include the Rexam vacuum cleaners business, of which USI will retain 25 percent ownership, and businesses in textiles, engineered components, footwear and windows.
USI will retain an 18.6 percent interest in Diversified overall.Vectura officials could not be reached to explain how Diversified fits the firm's other businesses.
USI said last May that it wanted to spin off Diversified. It decided to sell instead because Vectura's price and the deal's near-term completion were the superior option, the firm said in a Jan. 18 news release.
USI will have annual sales of about $2.5 billion after it sells Diversified. It will continue to hold plastics-intensive businesses such as Jacuzzi Inc. and pipe extruder Zurn Industries Inc. in its bath and plumbing division, and garden-tool maker Ames Co. in its hardware and tools division. Lighting Corp. of America is the other major USI division.
USI also announced the sale of Cosco Fire Protection Inc. and Firetrol Protection Systems Inc.