Coats sells North American crafts unit for $37m
Industrial thread maker Coats Group on Tuesday said it had sold its non-core North America crafts business to Spinrite Acquisition Corp for $37m (£28.7m) in cash.
Coats Group
81.90p
16:35 26/04/24
Financial Services
14,051.23
16:59 26/04/24
FTSE 250
19,824.16
16:59 26/04/24
FTSE 350
4,470.09
16:59 26/04/24
FTSE All-Share
4,423.59
17:14 26/04/24
Sale proceeds will initially reduce group net debt, Coats said a statement.
The crafts business manufactures and distributes foundation and fashion hand knitting yarns, threads, zips and a variety of needlecraft items.
In 2017 it generated sales of $149m and an operating profit of $12m before corporate costs. At 31 December 2017 gross assets were $66m and net operating assets were $48m.
“Further value accretive bolt-on acquisitions in the strategic focus areas of high growth and high-tech performance materials and software solutions businesses continue to be sought.”
Chief executive Rajiv Sharma said the sale “allows us to focus completely on our high performing business-to-business global apparel and footwear, and performance materials businesses”.
Analysts at RBC Capital Markets said the sale was positive news for Coats.
"The poorly performing NA Crafts business has been a drag on the shares. This disposal should allow management to focus on the better performing parts of the business and provides additional firepower for bolt-on acquisitions," they said in a note.