Cookson Group Plc, the world's largest maker of molds for the steel industry, agreed to sell its laminates business to Texas Pacific's Isola Group for $91 million to help cut debt. The stock rose as much as 6.5 percent.
The laminates business, which supplies materials for circuit boards, employs more than 1,500 people at plants in the U.S., Europe and Asia. The unit, worth 132 million pounds ($234 million) in sales last year, had returned to break-even point after an unprofitable first half and 2004, London-based Cookson said today.
Cookson, which had almost 400 million pounds of debt as of June 30, is now two-thirds of the way through a disposal program aimed at raising 100 million pounds by 2006. Chief Executive Officer Nick Salmon has also closed plants and cut costs to try to reverse four straight annual losses.
``Given the recent and historic travails of this business and its commodity nature, management have achieved an excellent price,'' Investec Securities analyst John Nuttall said in a note. ``The quality of group earnings is significantly improved as a direct consequence.''
Shares of Cookson advanced 21 pence to close at 400 pence in London. The stock has gained 13 percent this year for a market value of 762 million pounds.
Chandler, Arizona-based Isola, which produces a range of components for circuit boards used in industries from aerospace to computing, is run by Ray Sharpe, the former head of Cookson's electronics division. The purchase is likely to be completed in February, today's statement said.
``Whilst we have recently been successful in returning the laminates business to break-even, it has for too long had a detrimental impact on the earnings profile of our electronics division, and its disposal is the right thing,'' Salmon said in a statement.
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