Unifi To Acquire INVISTA Plant, Reorganizes European Operations
Unifi Inc., Greensboro, N.C., has agreed to acquire the Kinston, N.C.-based polyester filament
manufacturing assets of INVISTA Inc., Wichita, Kan., for a sum of approximately $21 million,
subject to a final inventory evaluation. The acquisition of other Invista polyester assets also is
under consideration by Unifi.
The agreement also includes the termination of a manufacturing alliance between the two companies that was formed in June 2000, and all related agreements.
The acquisition, expected to be completed during this quarter, will integrate polymer spinning into Unifi's operations. The Kinston facility employs approximately 775 people and currently generates annual sales of approximately $300 million, including sales to Unifi totaling $200 million. "This transaction enables Unifi to better serve the US market, while at the same time strengthening the company on a long-term basis," said Brian Parke, chairman and CEO, Unifi. "We are pleased to have come to an agreement with our alliance partners in this difficult market, as we will be in a better position to compete with imports from abroad as a result."
"Our first priority will be to streamline the product mix and production lines between Kinston and our existing domestic polyester operations to optimize capacity to fit the market," said Bill Lowe, COO and CFO, Unifi. He said the company expects full integration will take nine months to a year and noted that Kinston is currently underperforming.
According to Gerold Linzbach, president, Invista Textile Fibers, Charlotte, which currently operates the Kinston plant, the facility has been struggling to stay competitive and would have closed if Unifi had not agreed to purchase it. "This transaction is a more positive outcome for our employees, the community of Kinston and our customers," he said.
In other Unifi news, the company plans to reorganize its European operations as of November 2004 to focus on sales, service and distribution of its textured yarn. Unifi will close its Ireland-based Unifi Textured Yarns Europe manufacturing operations at the end of October, and thereafter will sell yarns produced in the United States and through Unifi Asia to its European customers. The company cited continuing unprofitability at the Ireland plant, with little hope of reversing that trend. The closure affects approximately 300 employees. According to Lowe, the European reorganization will have no significant impact on the company's US operations.