McCormick sells 2 foreign units Minipack Systems, Giza National divested in restructuring moves

December 24, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

McCormick & Co. Inc. announced yesterday that it sold two of its foreign operations.

The Sparks-based spice giant said it is selling its Giza National Dehydration Co. of Cairo, Egypt, to Kato Investment Co. of Cairo. The transaction is subject to approval of the Egyptian government.

McCormick also said it sold Minipack Systems Limited of Southampton, England -- a packaging division -- to a management buyout group.

McCormick declined to disclose the terms of the transactions.

Christopher J. Kurtzman, the company's treasurer, said divesting of the two operations constitutes a minor part of a restructuring announced in June to eliminate some product lines, businesses and a New York City packaging plant.

"We have some other projects we're working on relative to the restructuring that remain confidential," he said.

Before the sale, Giza National Dehydration was part of Gilroy Foods Inc., the California-based unit that made McCormick's onion and garlic-based products. McCormick sold Gilroy to ConAgra Inc. in August.

Minipack Systems Limited designs and manufactures miniature samples for promotional and trial use.

Together, the two divisions constitute about $20 million in annual sales, with GND generating more than half that amount. The divisions being sold or closed in the restructuring have total sales of about $80 million.

McCormick, which had $1.9 billion in sales in 1995, is betting that a leaner, more focused company will make higher margins on what's left.

Kurtzman declined to say how many people are employed by the two divisions. "Both businesses are being bought as running operations," he said. "We will assume that the employees will be retained by the new ownership."

Selling Giza made sense, especially after Gilroy was sold to ConAgra, Kurtzman said. McCormick sold Gilroy Foods and a companion power plant for $257 million.

Kurtzman said proceeds from the sales of Giza and Minipack will be used generally to improve the operations of the company.

Pub Date: 12/24/96

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