Coats pays £65m for US engineering firm

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The Independent Online
Coats Viyella, Britain's biggest textiles company, has paid £65m for Bace Manufacturing, a US precision engineering group which trades as SPM.

Neville Bain, Coats' chief executive, said SPM offered an excellent fit with Dynacast, Coats' precision engineering business.

Following the SPM acquisition, precision engineering will account for around 10 per cent of Coats' business. The other four core businesses are thread, clothing, fashion retailing, and home furnishing.

Mr Bain said the plastics activities of SPM and Dynacast would be incorporated in a new division headed by Mike Noggle, chief executive of SPM.

He said SPM would continue to run from eight factories in the US and there would be no job losses in the workforce of 1,100.

SPM's main customers are in the communications, computer, automotive and electronic industries and include AT&T, Ford and IBM.

Mr Bain said about 10 customers accounted for over 40 per cent of SPM's sales, but he did not think this made the group vulnerable. "People are reducing their supplier base significantly, and so we become mutually dependent on each other," he added.

In 1994 SPM made profits before interest and tax of £6.8m on sales of £75.4m.

Coats is shorly due to announce full-year trading results, with most analysts expecting taxable profits of £150-£155m.