 |
 |
||||||
[June 2005]
Jacuzzi Brands Announces Sale of Eljer
Jacuzzi Brands Inc (West Palm Beach, FL, USA) announced on 20 May 2005 that it had entered into an agreement to sell its Eljer Plumbingware business to an affiliate of Sun Capital Partners Inc. The transaction is expected to close by the end of Jacuzzi Brands' fiscal 2005 third quarter ending 2 July 2005. Terms of the sale were not disclosed.
Eljer Plumbingware offers a range of ceramic, composite and iron sanitaryware including bathtubs, WCs, bidets, sinks and taps under the Eljer(r) brandname. For the fiscal year ended 2 October 2004, Eljer recorded an operating loss of US$30.7 million on sales of US$150.5 million. For the first six months fiscal 2005 - to 2 April 2005 - Eljer recorded an operating loss of US$2.9 million on sales of US$69.2 million. Operating results for the two periods included restructuring charges of US$19.4 million and US$1.9 million respectively.
An affiliate of Sun Capital Partners Inc will assume all current assets and liabilities of Eljer, the long-term retiree medical liability and certain other liabilities, and also take the Ford City, PA, USA and Tupelo, MI, USA operations. Jacuzzi Brands will retain the Salem, OH manufacturing facility property which was closed in 2004.
Jacuzzi anticipates that it will incur pre-tax charges in the second half of fiscal 2005 of approximately US$65 million in connection with this sale. The charges are primarily related to non-cash asset write-offs, transition services and termination expenses to be incurred.
David Clarke, Chairman and CEO of Jacuzzi Brands, said: "We are pleased with this sale which has significant benefits. Despite ongoing product rationalization efforts and other initiatives, Eljer has continued to incur losses and consume a significant amount of management's time. This sale, together with the sale of Rexair announced earlier this month, will enable us to devote all our energies on maximizing the value of our Jacuzzi and Zurn operations".
Sun Capital, which also recently acquired Crane Plumbing, intends to operate Eljer as a stand-alone portfolio company and to maintain the corporate presence in Dallas, Texas.
ENDS