Unifi has agreed to acquire the INVISTA polyester filament manufacturing assets, including inventories, located in Kinston, N.C. Subject to a final inventory valuation, the purchase price will be approximately $21 million, which will be seller financed. The two companies are also discussing options for Unifi to acquire other polyester filament assets from INVISTA. No other terms of the agreement were disclosed.
Acquisition of the Kinston facility will result in a more vertically integrated base of operations for the Company in the U.S. through the addition of polymer spinning. The acquisition will also create new opportunities to better serve the Company's customers. As a part of the agreement, the manufacturing alliance between Unifi and INVISTA and all related agreements will be terminated. Sales from the Kinston facility are approximately $300 million of which approximately two-thirds are generated from sales to Unifi.
“This transaction enables Unifi to better serve the U.S. market, while at the same time strengthening the Company on a longer term basis,” said Brian Parke, Chairman and Chief Executive Officer for 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, Chief Operating Officer and Chief Financial Officer for Unifi. “We are taking a long-term view, as we anticipate that it will take nine to twelve months for us to fully integrate these facilities and begin to achieve the full benefit of the acquisition. The Kinston facility is underperforming in its present state, and we expect our results to be negatively impacted until we fully integrate the new capacity. Once we complete this integration, we expect our results to be enhanced by this combination.”
“We will continue to pursue opportunities that allow Unifi to enhance the competitiveness of its domestic polyester operations,” added Parke. “Our long-term success will come from creating efficiencies throughout the supply chain, as well as opportunities that are achievable through consolidation.”
“We are pleased to successfully conclude an agreement with Unifi on the Kinston facility,” said Gerold Linzbach, President, INVISTA Textile Fibers, which currently operates the facilities. “This transaction is a more positive outcome for our employees, the community of Kinston and our customers, as this facility struggled to remain competitive as a standalone asset. Our alternative would have been a closure of the facility.”
Subject to governmental approval and other customary conditions, the purchase of the Kinston facility is expected to be complete in Unifi's first fiscal quarter ending in September. The purchase of additional assets is subject to the results of the company's due diligence and other required approvals.
