Springs Global plans public offering
Casual Living Staff -- Casual Living, July 25, 2007
Sao Paolo, Brazil -- Only 21 months after Springs and Coteminas paired up to build an international textiles platform, Springs Global, the resulting global powerhouse, is raising cash by going public -- on the Brazilian stock exchange only.
|To view the full prospectus, click here.|
The deal will provide Springs' founding Close family with an exit strategy that will leave the Brazilian partner solidly in command of what's left of a century-old U.S. textiles company that has dwindled from more than 15,000 U.S. workers to fewer than 800.
In a prospectus for the initial public stock offering filed in Brazil, Springs Global says that after the deal is completed, Crandall Close Bowles will step down as co-chairman and co-chief executive officer, handing over the reins to Josue Christiano Gomes de Silva, the Brazilian-born and American-educated businessman who will soon exert sole control over the Latin textiles producer, Coteminas, founded by his father, Jose Alencar da Silva, vice president of Brazil since 2003.
In a sense, the deal brings Springs, founded in 1887, full circle.
It was once a publicly held U.S. company, America's largest home fashions supplier, when the Close family and an investment firm, Heartland Partners, bought out the company and took it private in 2001.
The merger with Coteminas was completed in early 2006. But it was hardly a marriage of equals. With Springs' sales and profits in decline, Coteminas held the upper hand and was able to force a renegotiation of the original deal terms -- decidedly in its favor. Wresting control of the company, the Brazilian stakeholder soon began hacking away at costs, shutting down higher-cost U.S. manufacturing plants and rapidly moving production off-shore. That left Springs with only a token manufacturing presence in South Carolina, where it had once been the state's largest employer.
Eyeing further global expansion, Springs Global said in the prospectus for the stock offering that it plans to build manufacturing operations in Asia, a key part of a strategy enunciated more than a year ago by Tom O'Connor, Springs sales and marketing chief, who said it was Springs' Global's ultimate goal to build Asian manufacturing to serve a rapidly emerging consumer base in Asian nations.
Under the terms of the stock offering, Springs Global will sell 30 million shares of stock: 19 million in a primary offering, and 11 million in a secondary offering. The targeted price is 21.5 Brazilian reals, or $11.48 U.S. using the rate of exchange effective July 25, 2007. At that rate, the deal could raise a total of $344.3 million U.S. before expenses and fees are deducted.