Film, sheet and compounding company British Vita plc intends to sell its 46 percent stake in Spartech Corp. after a relationship going back 12 years.
British Vita of Manchester, England, believes its long-standing investment in publicly traded Spartech is not delivering sufficient shareholder value.
``We are just not getting value for our investment in Spartech. We're looking to release shareholder value,'' explained Vita finance director Calvin O'Connor. Vita has kept its investment at a percentage in the ``high 30s or low 40s'' during the association and has seen very good development of Spartech over the years, he added.
Spartech welcomed the opportunity to ``broaden its shareholder base'' and expects to pursue its policy of expansion through internal growth and strategic acquisitions in North America and Europe.
In a statement, Spartech President and Chief Executive Officer Bradley B. Buechler said he understood ``the demanding market conditions of today that have led British Vita to conclude it must convert one of its principal assets into cash and simplify its portfolio of businesses.''
Clayton, Mo.-based Spartech is a top North American manufacturer of plastic sheet, roll stock and compounds.
Vita revealed the plan when it released its financial results for the first half of 2001. Vita reported first-half profit of £37.5 million ($54 million), down 15 percent from the first half of 2000. The company reported first-half sales of £488 million pounds ($713 million).
Vita also announced plans to cut its labor force by up to 150 on top of the 700 jobs axed in the United Kingdom, Germany and the United States in the past year. Cuts to date have included layoffs at foam plants in Britain, Germany, and the company's Vitafoam Inc. operation in High Point, N.C.
Vita reported a number of noncore business disposals, including quilt, bedding, upholstery strap and polyester fiber operations. O'Connor said Vita is looking at divesting two or three other operations, possibly in a matter of months.
The company blamed current difficult market conditions, particularly the squeeze between rising raw material prices and slower demand, for its decline in profit and sales in 2001. Although first-half profit was down, O'Connor stressed that the results were a 5 percent improvement over the second half of 2000.
Meanwhile, Vita is looking at three or four potential acquisitions before the end of the year as it adjusts its business portfolio, O'Connor said.
For the year ended Oct. 28, Spartech earned $49.9 million on sales of $961.4 million.