Two years after buying Decora Inc. out of bankruptcy protection, Pliant Corp. has sold the decorative-coatings company to a housewares maker.
Pliant officials also plan to close a film-conversion facility in Harrisville, R.I., and will upgrade equipment and add machinery to other plants that serve the food industry. Equipment expenditures are still undetermined.
The moves are unrelated to the sale of the Decora operation, which the film producer had renamed Pliant Solutions Corp. and struggled to integrate into its other packaging film operations.
Kittrich Corp. of La Mirada, Calif., acquired Pliant Solutions Oct. 5 for $10 million, said Pliant Chief Financial Officer James Ide. The sale includes cash proceeds of $6.5 million, and $3.5 million paid in monthly installments, according to a Securities and Exchange Commission document.
Decora, formerly in Fort Edward, N.Y., sold decorative and housewares surface coatings under the Con-Tact brand. At the time of its sale to Pliant, Decora was in financial distress, due partly to heavy debt burden after a management buyout from Rubbermaid Inc. in 1998. Pliant paid $18 million to pull Decora from Chapter 11 bankruptcy protection.
Production of Con-Tact shelf liner, glass coverings and wall accents was shifted to facilities in Mexico City and Danville, Ky., said an SEC filing. Decora's sole plant in Fort Edwards closed in early 2003.
Pliant Solutions struggled with profit. In 2003, the decorative-coatings unit recorded sales of $34.9 million but suffered a loss of $11.8 million. In the first six months of 2004, sales dropped 16 percent.
``We are focusing more on [earnings before depreciation, taxes and appreciation] for our businesses,'' said Ide, who joined Pliant in September. ``It hasn't been a fit.''
Pliant will use the proceeds to help pay its $100 million revolving credit facility, officials said.
``We had a great deal of interest from buyers, and the Kittrich team seems like the clear-cut natural home for the business,'' Pliant President and Chief Executive Officer Harold Bevis said in a news release.
Kittrich, a recognized name in housewares and hardware, already has five plants in the United States. The privately held firm makes Magic Brand vinyl coating and other wall covering, window fashion and home-decor products.
Kittrich officials did not respond to a request for information.
Meantime, Bevis said the Harrisville plant will close later this year and affect 50 jobs.
Schaumburg, Ill.-based Pliant did about $850 million in film sales in 2003.