Foamex Announces Sale of Joint Venture Interest in Foamex Asia
Furniture World News
Foamex International Inc., a leading manufacturer of flexible polyurethane and advanced polymer foam products announced that it has entered into a definitive agreement to sell its 70% equity interest in Foamex Asia Co., Ltd. ("Foamex Asia") to Hua Kee Company Limited ("Hua Kee"). Hua Kee is Foamex's joint venture partner in Foamex Asia.
After taxes, transaction costs and the satisfaction of various obligations associated with the transaction, Foamex expects to net approximately $22 million of cash from the transaction. Foamex intends to use the cash proceeds from the transaction to pay down debt. The Company expects to record a pre-tax gain of approximately $2 million in the third quarter of 2007, when the transaction is expected to close.
Commenting on the transaction, Jack Johnson, Chief Executive Officer of Foamex, said, "Upon an extensive review of our overall portfolio, we concluded that the ownership interest in this venture has not yielded satisfactory returns and is not positioned to facilitate our current global growth strategy. By selling our equity interest we unwind certain non-compete agreements and other restrictive agreements, thereby allowing us to concentrate on other business opportunities in the Asian markets where we see the most potential for growth. We are committed to leveraging strategic growth opportunities in Asia. Through this sale, we believe we will be better positioned to take advantage of the numerous opportunities previously unavailable to us in the Asian market."
About Foamex International Inc.: Foamex, headquartered in Linwood, PA, is a leading producer of polyurethane foam-based solutions and specialty comfort products. The Company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. For more information visit the Foamex web site at www.foamex.com.
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