A major shareholder bidding for Alltrista Corp. finds the firm's plastics business an attractive one. Marlin Partners II Chairman Martin Franklin said plastics are a growing segment of Alltrista, and if his firm succeeds in acquiring the Indianapolis company, it will expand the plastics business.
Alltrista is a major industrial thermoformer and does injection molding.
Franklin said in a telephone interview from his Marlin's Rye, N.Y., office that Marlin will examine all of Alltrista's businesses before deciding on any changes. Alltrista also makes home canning products and zinc products such as coin blanks.
"We would focus on building businesses" Alltrista already owns, Franklin said. Alltrista's large share of niche markets is a valuable asset of the firm, he added.
Marlin probably would extend the various businesses laterally into new markets where they can use the same distribution channels, according to Franklin.
Alltrista spokeswoman Kris Clauss said her company had no comment on the $30 per-share offer by Marlin. Franklin said on May 16 that Alltrista had not contacted him about a timetable for the company's board to decide on the Marlin offer. Clauss did not confirm a newspaper report that Alltrista's board would take three or four weeks to ponder the offer.
Marlin owns about 9 percent of Alltrista. Its offer, conditional on financing and Alltrista management support, would be worth about $172 million. The offer represented a 40 percent premium over Alltrista's share price on May 11, the day before it announced the Marlin offer. The share price on the New York Stock Exchange jumped 14 percent the day of the announcement to $24.75.
Alltrista's share price had been languishing near its 52-week low of $20.375 before the offer. Marlin communicated its concerns about the low stock price as early as mid-March.
Alltrista's profit fell to $400,000 in the first quarter, from $2.1 million for the same period a year ago. Sales for the quarter ended April 2 increased 57 percent to $81.3 million. Alltrista President and Chief Executive Officer Thomas Clark blamed the profit slide partly on reduced orders from heavy-truck producers and manufactured housing. Bright spots included its precision injection molding operations and integrated sheet extrusion and thermoforming operations serving the appliance market.
Alltrista acquired thermoformer Triangle Plastics Inc. of Independence, Iowa, last year. Alltrista sold its plastics packaging business last year.
The firm's plastics businesses generated sales of $48.5 million in the first quarter. About $36.6 million of the total was from industrial thermoformed parts and the rest from injection molding.