January 20, 2022
Lintec Announces Acquisition of Business and Establishment of New Company with U.S. Consolidated Subsidiary
At a meeting of the Board of Directors held today, Lintec Corporation (hereinafter "Lintec") announced that Morgan Adhesives Company, LLC (headquarters: Ohio, USA; wholly owned subsidiary of Mactac Americas, LLC, hereinafter "Mactac," which is a wholly owned subsidiary of Lintec USA Holding, Inc.*) has resolved to enter into a business transfer agreement with Spinnaker Holding Inc. (headquarters: Ohio) and its wholly owned subsidiary Spinnaker Coating, LLC (headquarters: Ohio). Morgan Adhesives Company, LLC also resolved to establish Spinnaker Pressure Sensitive Products LLC (headquarters: Ohio) as a wholly owned subsidiary and the transferee of this business.
- Lintec USA Holding, Inc. is a wholly owned subsidiary of Lintec.
1. Reason for Business Transfer
The Lintec Group has been moving forward with the globalization of its business based on the concept of local production, manufacturing products in locations that are closer to its customers and providing them with a stable supply.
In North America, Lintec acquired Mactac, a manufacturer and distributor of adhesive papers and film for label, and graphic film, in December 2016, establishing it as a Group company. To strengthen and expand the Group's core business, Printing & Variable Information Products Operations, Mactac acquired Duramark Products, Inc. in April 2021.
Spinnaker Coating, LLC, which is a subsidiary of Spinnaker Holding Inc., is a supplier of adhesive paper and film for labels, primarily servicing customers located in North America. Its strengths lie in the manufacture and sales of adhesive sheets for lithographic printing and small-lot, high-mix roll label products. The Lintec Group has determined that combining these strengths with the large lot and general-purpose roll label products that are Mactac strengths will enable the Group to expand its share of the North American market and increase profitability.
2. Overview of Business Transfer
(1) Business to be Transferred
Manufacture and sales of adhesive paper and film for labels and other products carried out by Spinnaker Coating, LLC, a subsidiary of Spinnaker Holding Inc.
(2) Transferor
| (1) Name | Spinnaker Holding Inc. | ||
|---|---|---|---|
| (2) Address | 518 E Water St. Troy, OH 45373 U.S.A. | ||
| (3) Title and name of representative | Chairman: Louis A. Guzzetti, Jr. | ||
| (4) Business description | Management of Spinnaker Coating, LLC business | ||
| (5) Capital | US$555 thousand (JPY 64 million) | ||
| (6) Established | January 11, 2002 | ||
| (7) Investor and equity ratio | Spinnaker Holding Inc. employee stock ownership plan (100%) | ||
| (8) Relationship between Lintec and the company concerned | There is no capital, personal or business relationship. | ||
| (9) Results and financial position for the last three years of the company concerned | |||
| Fiscal year | Ended December 2018 | Ended December 2019 | Ended December 2020 |
| Net assets | -US$13,502 thousand (-JPY1,553 million) |
-US$10,702 thousand (-JPY1,231 million) |
-US$5,977 thousand (-JPY687 million) |
| Total assets | US$44,613 thousand (JPY5,130 million) |
US$41,690 thousand (JPY4,794 million) |
US$42,612 thousand (JPY4,900 million) |
| Net sales | US$110,603 thousand (JPY12,719 million) |
US$110,209 thousand (JPY12,674 million) |
US$111,294 thousand (JPY12,799 million) |
| Net income | US$2,605 thousand (JPY 300 million) |
US$2,739 thousand (JPY 315 million) |
US$4,653 thousand (JPY535 million) |
- Conversion calculated at US$1 = JPY115
3. Transfer Price
| (1) Cost of transfer | Approx. US$40 million (JPY4.6 billion) |
|---|---|
| (2) Advisory fees, etc. | Approx. US$600 thousand (JPY 69 million) |
- Conversion calculated at US$1 = JPY115
4. Schedule
| (1) Date of board of directors' resolution | January 20, 2022 |
|---|---|
| (2) Business transfer agreement closing date | Scheduled for January 20, 2022 (local time) |
| (3) Closing (date of business transfer) | Scheduled for January 31, 2022 (local time) |
- Closing (date of business transfer) shall occur after the business transfer agreement conditions have been met.
5. Reason for Establishment of New Company
Due to the importance given to sustaining the brand and commercial rights built by Spinnaker Holding Inc. and Spinnaker Coating, LLC over the years, the decision was made to establish a new company, Spinnaker Pressure Sensitive Products LLC.
6. Overview of Newly Established Company
| (1) Name | Spinnaker Pressure Sensitive Products LLC |
|---|---|
| (2) Address | 4560 Darrow Rd. Stow, Ohio 44224 U.S.A. |
| (3) Title and name of representative | President: Edward LaForge |
| (4) Business description | Manufacture and sale of adhesive paper and film for labels |
| (5) Capital | Scheduled to be US$20 million (JPY2.3 billion) |
| (6) Date of establishment | Scheduled for January 31, 2022 (local time) |
| (7) Investor and equity ratio | Morgan Adhesives Company, LLC (100%) |
- Conversion calculated at US$1 = JPY115
- US$20 million (JPY2.3 billion) of the transfer price is to be used as capital, with the remaining US$20 million (JPY2.3 billion) to be financed by Morgan Adhesives Company, LLC through Group financing.
- Capital and date of establishment will be announced once they are confirmed after the scheduled January 31, 2022 (local time) closing date.
7. Future Outlook
The funds for the business transfer will be appropriated from the cash reserves of the Lintec and Mactac. Lintec will closely examine the impact of this move on its consolidated financial results and will promptly disclose any matters that require disclosure.
The contents of the News Release are as of the announcement date. Please note that they may differ from the latest information.