Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, September 21, 1995 TAG: 9509210068
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
Masland Corp., a Carlisle, Pa., maker of auto parts, has agreed to pay $15 million for a 29 percent share of Precision along with an option to acquire the rest of the company by Oct. 1, 1996. The deal, which is subject to approval by Masland's board of directors, is expected to close by Sept. 30.
Precision Fabrics, a privately held company based in Greensboro, N.C., operates a Vinton mill that makes material for computer ribbons, parachutes, high-tech filters, and other uses. The Masland deal will not affect manufacturing operations at Vinton, Lanty Smith, Precision's chairman, said in a telephone interview Wednesday.
Precision's work on automotive airbag design contributed to Masland's interest in the company, Smith said. Precision and Sandia National Laboratories announced in June that they had developed an airbag half as large and heavy as existing airbags, representing the first improvement in airbag design in 25 years.
"We believe that investing in this exciting new development now and having the option to merge the two companies later is a great opportunity for Masland," William Branch, Masland's chairman, said in a prepared statement this week.
Response by automakers to the announcement of the new airbag has been "very favorable," Smith said, adding Masland is interested in helping Precision market it.
Masland, through its operating subsidiary Masland Industries, is a major designer and manufacturer of interior trim and acoustic systems for passenger cars and light trucks. The company operates 10 plants in the United States, Canada and Mexico. Its customers include Chrysler, Ford, General Motors, Honda, Isuzu, Nissan and Toyota.
An association with Masland will give Precision an entree to the automotive industry that it wouldn't otherwise have, Smith said. Because of the long lag time in auto design, Precision aims at entering the automotive market with its airbag in the 1998 model year, he said.
All material for Precision's airbag will be made at the Vinton plant, Smith said. The airbag business could help offset a lack of growth in the computer-ribbon business that can be attributed to the growing popularity of laser printers, he said.
"We only see positive things" from a relationship with Masland, Smith said.
If Masland exercises its option to acquire the rest of Precision, it will do it by exchanging 4.1 million shares of Masland stock in a tax-free transaction, the company said. Masland stock, traded on the Nasdaq stock market, closed Wednesday at $14.371/2 a share, down 121/2 cents from Tuesday.
Precision's sales for the fiscal year ending Sept. 30 will be roughly $170 million, the company said. The company, formed in 1988, had been part of Burlington Industries. It also operates plants in Greensboro and Jamestown, N.C., and has 1,300 employees.
Masland, with 3,000 employees, had net income of $21 million on sales of $496.6 million for the fiscal year ending June 30, 1995.
by CNB