KEY POINTS:
Skellerup Holdings plans to acquire or establish a third US business leg by the end of this year after selling four non-core business units for $12.1 million.
The rubber products maker yesterday announced it had reached an agreement to sell its roofing, conveyor and containment businesses as well
as Batavian Rubber to Tiri Group, which belongs to Nelson-based American businessman Tom Sturgess.
Skellerup had been trying to sell six of its business units since June last when it undertook a restructure in a bid to specialise in global technical polymers, mainly rubber.
One of the businesses, Alucobond, which imports and markets aluminium composite cladding, is still on the market but the company had withdrawn its vacuum pump business from the market after failing to find a buyer willing to match its price.
Skellerup managing director Donald Stewart said the four units it had sold were still great businesses but were considered to be non-technical and did not add a lot to the company's intellectual property.
"We believe those businesses don't have a big growth profile."
He said Skellerup hoped to sell Alucobond by the end of the year but was happy to hold on to it as it was big enough and sufficiently contained to warrant retention.
The sale of the four business units is expected to bring a $2 million capital gain to the business and although that money is expected to be used on clearing debt Stewart said the company's books were now in a position to allow it to expand again.
"We have got ourselves to the stage where we want to do something in the United States, an acquisition is a possibility, equally we would consider forming our own business," he said.
The company already has two businesses in the US, the Masport Pumps business and a dairy rubber distribution business.
But the new business leg was likely to involve rubber for the industrial sector. Stewart said he was not concerned about the current state of the US economy as it already had around $6 million worth of business which could be distributed through the third potential US company. This would not involve the closure or job losses in other parts of the business.
Last year the firm announced 100 job losses from its Christchurch plant after increased pressure on exports from the high New Zealand dollar.
Stewart said the restructure had mainly been completed now and although there may be later moves to consolidate sites it was happy with the number of staff it now had.
So far the restructure has cost the company $17.9 million, $1.9 million more than initial predictions.
Last year the group made a profit of $637,000 - benefiting from a tax credit which would otherwise have seen the group $7 million in the red.
But the poor profit meant that it did not pay shareholders a dividend in either October last or this month.
Yesterday the group said it was on track with previous guidance for a net profit after tax of $12.5 million for the 2008 financial year and expected to resume dividend payments in October.
Forsyth Barr analyst John Cairns welcomed the sale but said the market had been a bit put out by how long the process had taken.
The sale of the four business units will settle on April 30. Sturgess' Tiri Group is made up of companies that were left over and sold off after Goldman Sachs decided to float part of Viking Pacific in the form of Skellerup. They include well-known brands Masport, New Zealand Insulation and Temuka Pottery.
Skellerup's share price closed up 2c to 90c.
CHECK LIST
SOLD
* Roofing, conveyor and containment businesses
* Batavian Rubber - main product is balloons
WITHDRAWN
* Vacuum Pump business
STILL ON THE MARKET
* Alucobond - an import and marketing company for aluminium composite cladding