Heywood Williams plc is selling HW Plastics, its United Kingdom plastic systems division, to Latium Plastics Holdings Ltd., a private British PVC profile extruder, window fabricator and installer.
The deal, worth around £20 million ($36 million), calls for Wilmslow, England-based Latium to pay £3 million ($5.4 million) in cash and £17 million ($30 million) to cover claims linked to Heywood Williams' past supply of discolored profile products.
In 2003, Heywood Williams successfully sued Tioxide Europe for compensation over the discoloration, or ``pinking,'' of PVC profiles that Heywood Williams sold in the 1990s. Tioxide had supplied pigment for the profiles.
``We are selling HW Plastics at a fair price, eliminating potential future operating losses and also removing future potential cash outflows associated with product rectification. ... This [deal] provides a continuation of employment for its employees,'' said Heywood Williams Chief Executive Officer Robert Barr. The deal awaits Heywood Williams shareholder approval.
Latium Plastics Holdings owns two leading British window fabrication businesses: Everest and Weatherseal, as well as other, glass interests.
In July, Huddersfield, England-based Heywood Williams announced it was seeking a buyer for its plastics systems business to focus on ``the design, development, marketing and distribution of branded building products.''
HW Plastics, a leading U.K. supplier of PVC windows and extruded cellular building products, runs plants in Macclesfield and Scunthorpe, England, and a distribution center in Trentham, England. The firm's profile brands include Kestrel and Spectus, and employs around 600.
HW Plastics recorded sales last year of almost £66 million ($118 million), representing around 20 percent of the parent company's sales, with an operating loss of £4 million ($7.2 million).
Since 2003, Heywood Williams has suffered several major setbacks. It has seen mounting losses, the departure of two chief executives within three months, two strategic reviews, radical restructuring resulting in job cutbacks and the sale or closure of a number of noncore businesses.