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Archive for Saturday, May 16, 1998

SEALRIGHT SALE STILL ON TRACK, BUYER SAYS

May 16, 1998

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A Finnish food conglomerate said Friday that it could complete its acquisition of Sealright Co. Inc.'s DeSoto-based food packaging business by the end of June.

``The pending acquisition of Sealright ... is proceeding well,'' said Huhtamaki, the Helsinki-based confectionery and packaging group.

Also Friday, a DeSoto city official said the city council apparently has decided to allow a 10-year tax abatement, granted when Sealright built the DeSoto plant about four years ago, to continue under Huhtamaki's ownership. The DeSoto City Council heard from Sealright officials at their meeting Thursday night.

In early March, Huhtamaki announced the acquisition of part of Sealright -- which makes ice-cream containers -- for $122 million and assumed debt of about $80 million.

The deal includes the headquarters and plant in DeSoto, as well as facilities in Fulton, N.Y., Los Angeles and Brisbane, Australia. The business includes all of Sealright's paperboard packaging and packaging equipment systems.

``Sealright's rigid packaging business, the part Huhtamaki will absorb, is performing according to projections,'' Huhtamaki said. ``Reflecting cost reduction programs and reorganization implemented in late 1997, operating performance has improved in both paper packaging plants, at Fulton, New York, and Los Angeles, California, as well as in the company's leasing and equipment service operations.''

A new lithographic printing system had been installed at Fulton and is in commercial production, it said.

Huhtamaki also said it had appointed Mark Stanton, currently senior vice president at Huhtamaki's Polarcup division and managing director of Polarcup in Britain, to be president of Sealright.

The company said the Sealright deal had been cleared by antitrust authorities.

Huhtamaki also announced plans to purchase another U.S.-based packaging company.

It signed a letter of intent to purchase Tetra Cup, of Pleasant Prairie, Wis. Tetra Cup has 110 employees and posted 1997 sales of about $20 million. Huhtamaki said it would continue its manufacturing operations in Pleasant Prairie. The transaction is expected to be completed during the next two months, subject to regulatory approval.

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