Sonics & Materials Inc. has sold 90 percent of its subsidiary ToolTex Inc. back to Paul and Kathy Spurgeon, four years after buying the maker of welding machinery.
The two companies will continue their 20-year relationship. ToolTex, based in Grove City, Ohio, will continue to distribute ultrasonic welding equipment made by Sonics & Materials. But ToolTex plans to expand its own line of welding machines, according to President Paul Spurgeon.
Sonics & Materials, which is traded over the counter on the Nasdaq Electronic Bulletin Board, announced the sale Aug. 27. Sonics said the sale would result in a one-time charge against earnings in the fourth quarter of about $1.3 million to $1.5 million - $874,000 of that from the write-off of goodwill.
Looking ahead, Sonics said selling ToolTex would help its cash flow.
Based in Newtown, Conn., Sonics & Materials purchased ToolTex in 1997 and ran it as a wholly owned subsidiary. Paul Spurgeon said the two companies took different approaches to marketing machines and were not a good fit as a single company.
Spurgeon founded ToolTex in 1987.
The company employs 13 making machinery for welding by the hot plate, vibration and spin welding methods, heat staking, hot air/cold stake machines, hot stamping equipment, and hand-operated assembly presses.
ToolTex also sells hand-held welders from Drader Manufacturing of Edmonton, Alberta.
Automotive applications account for about 70 percent of sales.
Spurgeon said ToolTex pioneered a process to do welding of automotive carpet.
Kathy Spurgeon now has majority ownership in ToolTex.
Terms of the sale to the Spurgeons were not disclosed.