Reichhold announced that the executive management team, led by president and CEO John S. Gaither, has reached agreement with Dainippon Ink and Chemicals, Inc.(DIC) for a management buyout. Reichhold has been the wholly owned subsidiary of DIC since 1987. The agreement was signed on Sept. 12, 2005 and is planned to close on Sept. 30, 2005.
According to reports, DIC sold Reichhold for $1, and booked a $486 million special loss for the first half of 2005. DIC had acquired Reichhold in 1987 for $540 million. Reichhold posted a $216.1 million net loss in 2004, and will be responsible for repaying $197 million of its debt to DIC over the next three years.
DIC had planned a restructuring of the company and concluded that the sale of all shares of Reichhold to the existing management team was in the best interest of both firms.
“We appreciate the relationship we have enjoyed with DIC over the years. Our relationship now takes on a different character, but we anticipate that it will continue to be a productive and cordial one,” said Mr. Gaither. “We look forward to many continued years of mutual success. I was asked by DIC to rejoin Reichhold in 2004 and quickly assembled the executive team of former and current Reichhold veterans who are participating in this management buy-out. We are very excited to be a part of the next phase of Reichhold’s history.”
“Today marks the beginning of a new chapter in Dainippon’s relationship with Reichhold,” said DIC president Dr. Koji Oe. “We will develop a fruitful relationship and look to a bright future for both our companies.”
Under the terms of the agreement, although DIC will retain the Austrian coatings operations, both DIC and Reichhold will be free to continue to independently supply the worldwide coatings markets. The name Reichhold will be retained under the new ownership.
With 1,600 employees and 16 manufacturing facilities worldwide, Reichhold’s manufacturing reach includes 11 plants in the Americas, four in Europe and one in the Middle East. Reichhold’s world headquarters and technology center is located in Research Triangle Park, N.C.