Western Australian industrial Joyce Corporation Ltd has completed its exit from manufacturing, completing the sale of its foam business for $16 million to Indian company Sheela Foam Private Ltd.
Western Australian industrial Joyce Corporation Ltd has completed its exit from manufacturing, completing the sale of its foam business for $16 million to Indian company Sheela Foam Private Ltd.
Joyce chairman Dan Smetana said the move, ratified by shareholders yesterday, ended more than a century of manufacturing for the entity which will now concentrate on its retail activities - notably Bedshed.
The foam business had been on the market for some time, and an earlier deal with Pacific Brands Ltd was thwarted by the Australian Competition and Consumer Commission.
Mr Smetana said that given the company's debt-free status and with $5 million cash in hand there would also be moves to acquire significantly greater ownership of Bedshed.
Joyce was a major player in the foam market manufacturing the largest range of polyurethane foam products in Australia, with operations in five states and holding 40 per cent of the flexible polyurethane foam market
Foam brand names included Regal Comfort, Active Comfort, Premium Comfort, Ultimate Comfort, Indulgence Comfort, Indulgence Plus.
Below is the full announcement:
Joyce Completes Sale of Foam Businesses
The Directors of Joyce Corporation Limited announce that settlement has now been completed; the consideration in respect of the sale was approximately $16 million.
The sale of the company's manufacturing activities comes after 119 years of proactive commitment to the Australian industrial community and a great many years of approaches to governments (including Prime Ministers) on the importance and relevance of manufacturing to the strategic and economic future of our nation. The sale to Sheela Foam however provides an international dimension to what were Joyce's Australian manufacturing activities and this will provide a global future.
The decision to sell to an international company is also consistent with the previously expressed view that there is a need for more robust business structures in Australia in order to help domestic manufacturers compete on a global basis.
The offer compares favourably in total value terms to the ACCC thwarted sale to Pacific Brands Limited in March 2005, if property values are brought to account.
The sale represents the start of a new era for Joyce Corporation Ltd, which will see a substantially enhanced focus on Bedshed, our long held involvement in the retail sector and its activities, comprising franchised retailing and importing. There will also be a move to acquire significantly greater ownership of Bedshed.
The sale results in the Company having zero debt and more than $5 million cash in hand.
As announced previously there will be a 5-cent per share capital return which will be paid in early February 2006. Further capital returns will occur if complementary business expansion opportunities are not identified over the next two years.
The sale provides significant prospects for shareholder gains.
Net assets following the sale and with recent property valuations on a sale and leaseback basis and a more current value for Bedshed would suggest resultant net assets in the range of $1.30 to $1.50 per share.
Marsh 2005 announcement:
The ACCC to-day determined that it would oppose the proposed acquisition by
Pacific Brands Limited of Joyce Corporation Ltd's foam businesses. Earlier
today Pacific Brands made an announcement on the future of the proposed
sale agreement based on the outcome of the ACCC decision.
Nonetheless the company will now pursue other options to ensure maximised
performance of our foam activities and maximised gains for shareholders and
other stakeholders.
As announced at the Extraordinary General Meeting of shareholders held on
the 4th February results for the first six months of the year were 15% ahead of
the previous year.
2 March 2005
