ERJ staff report (DS)
Melksham, UK -- Avon Rubber plc has exchanged contracts for the sale of its Aerosol Gasket business to Crosslinks Ltd, based in South Wales and Corsham, Wiltshire, for £1.75 million (Euro 2.4 million) in cash. Crosslinks is a subsidiary of the Avon group, run by entrepreneur Mark Rushin. After the deal is completed, Crosslinks will change its name to Avon Engineered Rubber Ltd. Despite the similarity in name, Avon Rubber and Avon Group are not connected with each other.
Avon Rubber said the gaskets business, currently located in Avon's Wiltshire facility, manufactures and supplies cupseals and stem gaskets for a global customer base. It currently employs approximately 68 staff and incurred an operating loss of £0.1 million (before an allocation of £1.1 million of shared service costs from our UK manufacturing facility) on a turnover of £4.7 million, in the financial year to 30 September 2007. The gross assets of the disposed business were £3.2 million and the net assets £2.1 million as at that date.
Completion is expected to be in early March 2008 and the proceeds will be utilised to reduce current borrowings.
Mark Rushin, owner of the Avon Group said the aerosols business said the unit will triple the size of the existing Crosslinks business and help the unit move away from low-margin automotive activities. He added that Crosslinks already knows and understands rubber compounding and gasket cutting.
Crosslinks currently operates a rubber moulding business and a rubber mixing plant, but both are currently running at around 70 percent capacity. Rushin said, "the most labour intensive gasket cutting operation can be relocated to Crosslinks. he said the acquisition adds another 3000 tonnes of rubber compound to the current 2000 tonnes output.
We will design and manufacture rubber gaskets for aerosol valve manufacturers who in turn supply the manufacturers of the 14 000 million aerosol cans produced each year. The market forecasts steady growth of around 2.5 percent annually.