Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, October 29, 1994 TAG: 9410310028
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: MAG POF| STAFF WRITER
DATELINE: LENGTH: Medium
"We view that plant as an important part of the transaction," said Rod Bitz, spokesman at Alliant's headquarters in Hopkins, Minn. The plant makes propellant that Alliant, one of the nation's major defense contractors, has had to buy from outside manufacturers.
Alliant plans no changes at the Radford plant, Bitz said. The announcement, however, said that the company expects "to derive substantial additional benefits through reduced overhead, consolidation of operations and combined operating efficiencies."
Alliant has said there would be no changes in benefits or pay scale.
The transaction is expected to close during the first quarter of 1995. It is subject to government review and approval by Alliant shareholders.
Terms of the sale changed slightly from prior announcements because some assets were eliminated from the sale, Bitz said. Negotiations between the two companies began in January and were made public in July.
Alliant will pay Hercules $300 million plus 3.86 million newly issued shares of Alliant stock. Earlier announcements said the agreement called for a price of $365 million plus 3.5 million shares. That means Hercules will own 30 percent of Alliant, rather than 26 percent.
The company, reflecting combined ownership, would have annual sales of $1.4 billion and 10,200 employees after the acquisition. Radford is one of eight plants involved in the transfer. Alliant is the largest supplier of ammunition to the Department of Defense.
Hercules Aerospace operations are expected to contribute about $60 million in annual revenue with an operating margin yielding 8 percent to 10 percent.
Stock of both companies, traded on the New York Stock Exchange, rose sharply Friday. Hercules stock closed at $117.371/2 a share, up $10.50 from Thursday. Alliant stock closed at $34.25, up $4.75 a share.
Joel Greenblatt, Alliant's chairman, said the company "will implement a comprehensive operating efficiency and cost-reduction plan over the next year, with the goal of increasing its stand-alone operating margin by at least 1 to 2 percent, exclusive of any acquisition-related operating synergies."
by CNB