Leggett & Platt selling Prime Foam operations
By Furniture Today Staff -- Furniture Today, April 30, 2007
Carthage, Mo. — Components supplier Leggett & Platt said Tuesday it is selling its Prime Foam operations and exiting the polyurethane foam business for furniture and bedding.
The sale of Prime Foam, which has annual revenues of about $200 million, represents the largest divestiture in Leggett's history. The foam supplier's new owner is Comfort Co., which is controlled by the Greenwich, Conn.,-based private equity firm of Catterton Partners.
Leggett said the deal should result in a pretax gain of about $24 million or 6 cents per share. It also will reduce the company's full-year operating earnings by about 4 cents per share.
Leggett said it would retain its foam operations that produce carpet underlay.
David Haffner, president and CEO, said that while Prime Foam is performing well, the company's market position is small and the business doesn't fit into the company's long-term strategic plan.
"We will continually evaluate the strategy and competitive positions of our individual businesses, and plan to participate only in markets in which we can be a market leader and generate an attractive cash flow return on investment," Haffner said.
