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Rockwell to Sell Printing Press Company

May 01, 1996|GREG MILLER | TIMES STAFF WRITER

As part of an ongoing effort to shed its stodgier business units, Rockwell International Corp. said Tuesday that it has signed an agreement to sell its Illinois-based Graphic Systems business, which makes newspaper and commercial printing presses.

Under the agreement, Graphic Systems would be sold for about $600 million in cash to a new corporation formed by the New York investment firm Stonington Partners, Rockwell executives said.

The existing management team at Graphic Systems, including a president hired by Rockwell last fall, would also purchase a piece of the new company. The size of that stake hasn't yet been determined, executives said.

Graphic Systems had sales of $697 million in 1995 and has about 2,800 employees. The company said no layoffs are planned.

The sale, subject to regulatory approval, would be the latest in a series of moves by Seal Beach-based Rockwell over the last decade to recast itself as a high-technology conglomerate.

Graphic Systems "is an excellent business but doesn't fit into the kind of company Rockwell wants to be in the future," said Terry Francisco, a Rockwell spokesman.

In recent weeks, Rockwell has reportedly begun to consider a sale of its aerospace and defense operations, units that once defined the company but have been elbowed aside in recent years by emerging semiconductor, industrial automation and automotive products divisions.

Rockwell executives refused to comment on the company's plans for its aerospace operations, but Chairman Donald R. Beall has previously said the company's future will be focused on commercial electronics.

Rockwell has owned Graphic Systems since 1968, but it had been publicly seeking a buyer for the unit since January, when company executives said they were already negotiating with several potential purchasers. The deal with Stonington Partners, which will operate the printing press unit under the name Goss Graphic Systems Inc., is expected to close this summer.

Graphic Systems accounted for about 4% of Rockwell's profit and 5% of revenue last year, but the unit's profit levels have tumbled from $121 million in 1991 to $66 million last year.

Graphic Systems is based in Westmont, Ill., and has U.S. operations in Iowa and Pennsylvania. The company also has operations in England, France, Japan and China.

Stonington Partners is a private equity investment firm that specializes in investing in mature companies.

Rockwell closed at $58.50 per share Tuesday, unchanged in trading on the New York Stock Exchange.

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