Husky announces possible sale, cuts 85 Canadian jobs (April 01, 2007)
Bolton, Ont.-based injection molding equipment manufacturer Husky Injection Molding Systems Ltd. has initiated a review that could lead to the sale of part or all of the company's shares.
Bolton, Ont.-based injection molding equipment manufacturer Husky Injection Molding Systems Ltd. has initiated a review that could lead to the sale of part or all of the company’s shares.
The company announced that it would consider the possibility of a sale of the company’s shares or a strategic combination with another business.
The move to review the company’s options is based on founder, former president and CEO and major shareholder Robert Schad’s decision to consider a sale of his holdings. “Over the past decade, we have made substantial investments to develop our leading technology platform, expand our markets and distribution network, improve our operations, and build a strong management team,” Schad said. “While Husky’s competitive position has become stronger as a result, we do not believe that this position is reflected in our current market valuation.”
The company has appointed Citigroup Global Markets as the financial advisor, but there is no assurance that the review will result in a strategic or financial transaction.
The news of a possible sale overshadowed Husky’s weak second quarter numbers and a Canadian workforce reduction. Net earnings for the second quarter that ended on January 31 were US$10.5 million, compared to US$12 million in the same period last year. Husky is also cutting 85 jobs from its Bolton facility.
“Becoming a leaner organization is a critical part of our goal of achieving profitable growth,” John Galt, Husky’s president and CEO, said. “While we have made progress, many areas of inefficiency remain and we are competing with companies around the world who are learning and getting better as well.”
Galt also cited the inefficiencies associated with manufacturing goods in Canada that are destined for distant markets, and said that the company had addressed issues such as a high Canadian dollar and ineffective research and development tax structures with the government, but that no action has yet been taken.