Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, January 21, 1994                   TAG: 9401210097
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium

HERCULES TO SELL GROUP

The company announced Thursday that it has signed a letter of intent to sell its packaging films group to Applied Extrusion Technologies Inc. of Salem, Mass. Settlement of the deal is expected around April 1.

Hercules, with headquarters in Wilmington, Del., announced in December that it was putting the packaging business up for sale. Hercules also operates the U.S. Army arsenal in Radford.

The packaging films division also has plants in Terre Haute, Ind., and Quebec, Canada.

The Covington plant, which makes polypropylene film used primarily in packaging snack foods and tobacco products, has 350 employees.

Hercules employees will become employees of the buyer under the terms of the sale.

The selling price was not revealed, but Hercules said it will make a profit on the cash deal.

Stressing that the deal involves only a letter of intent at this point, AET spokesman Jay Jacobson said any planning the company is doing regarding the acquisition is still ongoing.

It's expected, though, that all three packaging film plants will continue to operate, he said.

If business continues to grow, expansion of the Covington plant is a possibility, Jacobson said.

AET makes a broad range of extruded thermoplastic net used primarily in health care and by other businesses. The company operates manufacturing plants in Delaware and Massachusetts.

The company's sales for the year ending Sept. 30 were $41.3 million, an increase of 18.7 percent over a year earlier.

AET has a former relationship with Hercules. The company was founded in 1986 to buy a Middletown, Del., plant and the assets of the plastic products division of Hercules.

In 1990, AET purchased the Maynard Plastics Division of Chelsea Industries.

Since AET's founding, sales have risen an average of 31 percent a year, according to a company statement.

Net earnings have increased 425 percent, or an average of 32 percent annually.

AET's stock is listed on the Nasdaq under the symbol "AETC."

Hercules, which also has taken steps to divest itself of its liquid molding resins business, said the packaging films business was profitable but did not fit with the company's plans.

The company has continued to operate the Covington plant while a buyer was sought.

Hercules said it is continuing to analyze other businesses for divestiture.