Rubbermaid Buys Graco For $320 Million
Thu., Sept. 5, 1996
Rubbermaid Inc., already trying to contend with a restructuring and rising costs for raw materials, announced expansion plans Wednesday, saying it would buy Graco Children’s Products Inc. for $320 million.
“Graco is a natural complement to our juvenile products business,” said Wolfgang R. Schmitt, Rubbermaid chairman and chief executive officer.
Rubbermaid makes and sells plastic and rubber housewares, health care products, office furniture and Little Tikes toys. Its stock fell sharply after the announcement to $22.87-1/2 a share, down $3.62-1/2 on the New York Stock Exchange.
Carol Warner, an analyst at Salomon Brothers in New York, cut her earnings estimates for all of 1996 to $1.19 a share from $1.25.
Graco makes strollers, play pens, walkers and other products for babies and toddlers. Its sales this year are expected to total about $270 million.
Rubbermaid announced a two-year restructuring in December, when it took a $158 million charge against earnings. The plan included eliminating about 1,260 jobs, and the closing of nine facilities.
Rubbermaid expects the deal, financed through short-term debt, to close by Oct. 31. The privately held Graco, based in Elverson, Pa., is owned by AEA Investors and management.
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