Reichhold to sell its industrial adhesives unit

Reichhold Inc. is in talks to sell its industrial adhesives unit, which accounted for $250 million in sales last year, as part of a restructuring effort that will enable it to focus on its core businesses.

All of the 700 employees at Reichhold's Swift Adhesives unit are expected to retain their jobs if the sale to Forbo Holding of Switzerland goes through, Reichhold spokeswoman Sue Ann Pentecost said. The approximately 80 Swift employees who work in Research Triangle Park are expected to continue to be based here as well.

Forbo is the No. 1 maker of linoleum. The two companies expect to wrap up negotiations by year's end but did not disclose the price being discussed.

Reichhold is based in RTP, where it has about 400 employees, including the 80 Swift workers. The company, which is a subsidiary of Dainippon Ink and Chemicals of Japan, posted sales of $1.3 billion in 1999, according to the company's Web site, http://www.reichhold.com. It hasn't disclosed revenue figures for 2000.

The company, which started the year by naming Gary Krall president and chief operating officer in charge of day-to-day operations, has fashioned a restructuring plan that calls for it to focus on its composites and coatings business.

As part of that restructuring, Reichhold announced in March that it was folding its synthetic latex business into a joint venture with Dow Chemical. In addition to forming the joint venture, to be called Dow Reichhold Specialty Latex, Reichhold also agreed to sell its carpet and paper latex businesses to Dow for an undisclosed price.

That deal is awaiting regulatory approval. The joint venture will be based in RTP, where it will employ about 175 workers, Pentecost said.

In addition to North America, the Swift Adhesives business operates in Europe and South America and is involved in a joint venture in China. Its adhesives are used for product assembly, packaging, graphic arts, construction and automotive applications.

Forbo beefed up its adhesives business earlier this year with some smaller acquisitions.

Forbo said in a news release announcing the talks with Reichhold: "This transaction will turn Forbo into an important global player in industrial adhesives and will provide the company with a significant platform to further develop its profitable industrial adhesives business."

Forbo's chief executive officer, Werner Kummer, said last week that he wanted to make acquisitions during the economic downturn, while purchase prices are reasonable.

600450 Reichhold to sell its industrial adhesives unit glassonweb.com
Date: 19 November 2001
Source: GE Sealant

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