Pacific Dunlop Sells GNB Technologies
6 July 1998
Pacific Dunlop Sells GNB Technologies
NEW YORK--July 6, 1998--Pacific Dunlop Limited has sold its GNB Technologies battery business to Quexco Inc. for $AUD900 million ($US550 million).The Dallas, Texas-based Quexco Inc. is a closely-held, private holding company for a group of businesses whose main focus is the manufacture and distribution of recycled metals in the USA and Europe. Quexco Inc. and its affiliates currently have annual sales of more than $US1 billion and 2,300 employees.
The managing director of Pacific Dunlop, Rod Chadwick, said the sale was in the best interests of shareholders and the GNB battery business. Senior management of GNB will stay with the business. The sale is subject to regulatory approvals in the USA, Australia and New Zealand.
"I believe today's announcement is a significant step forward in the further reshaping of Pacific Dunlop," he said.
"It allows the company to focus more sharply on Ansell, which we are committed to building as a truly global business with world leadership in its products, and on our four domestic businesses each of which is a market leader in its field.
"It also demonstrates we are committed to active asset portfolio management as a means of generating better shareholder returns in the future."
Chadwick said the benefits of the sale to Pacific Dunlop would be immediate and enduring, as GNB had been an underperforming business which had found growth difficult in the competitive US automotive battery market.
"The sale of GNB has removed a major financial impediment to the improvement of the Company's performance and we are confident of our ability to deliver better returns to shareholders in the years ahead," he said.
Chadwick said much tighter cost control, greater productivity and continuing management priority on investment in growth businesses would drive improved performance going forward.
"The sale means Pacific Dunlop will have a higher performing asset base and a much better balance between growth capacity and cash generation," he said.
Chadwick said the sale would result in an abnormal loss of $AUD88 million after transaction costs and provisions.
"The proceeds from the sale will be used for strategic investment and reduction of debt."
GNB technologies was purchased by Pacific Dunlop in 1987 and is headquartered in Atlanta.
With sales of about $1.2 billion last financial year, it is one of the world's largest manufacturers of automotive and industrial batteries under the Champion, Marshall, Absolyte, Marathon and Sprinter brands at 18 plants in the United States, Australia, and New Zealand.
Chadwick said the move of GNB to a new owner and the subsequent potential to take advantage of synergies provided opportunity for the new owner to achieve full value from GNB's range of strong brands and proprietary technology.
The Quexco Group recycles lead scrap into lead alloys and pure lead, lead seal compounds and fabricated lead anode product. An associated company of Quexco, Eco-Bat Technologies PLC, is the largest producer of lead and lead products in the European Union, operating eleven facilities in the United Kingdom, Germany, France, Italy and Austria.
J.P. Morgan and Zilkha & Company advised Pacific Dunlop, and Chase Securities and Allen & Company advised Quexco Inc. in this transaction.