Coats sells North American crafts unit for $37m

22nd Jan 2019 07:48

(Sharecast News) - Industrial thread maker Coats Group on Tuesday said it had sold its non-core North America crafts business to Spinrite Acquisition Corp for $37m (£28.7m) in cash.Sale proceeds will initially reduce group net debt, Coats said a statement.The crafts business manufactures and distributes foundation and fashion hand knitting yarns, threads, zips and a variety of needlecraft items.In 2017 it generated sales of $149m and an operating profit of $12m before corporate costs. At 31 December 2017 gross assets were $66m and net operating assets were $48m."Further value accretive bolt-on acquisitions in the strategic focus areas of high growth and high-tech performance materials and software solutions businesses continue to be sought."Chief executive Rajiv Sharma said the sale "allows us to focus completely on our high performing business-to-business global apparel and footwear, and performance materials businesses".Analysts at RBC Capital Markets said the sale was positive news for Coats."The poorly performing NA Crafts business has been a drag on the shares. This disposal should allow management to focus on the better performing parts of the business and provides additional firepower for bolt-on acquisitions," they said in a note.