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CALIFORNIA

Canadian Company to Buy SEDA Packaging

June 18, 1997|DEBORA VRANA | TIMES STAFF WRITER

SEDA Specialty Packaging Corp., a Compton maker of plastics and glass containers, has agreed to be acquired by a Canadian firm for $255 million in cash.

CCL Industries Inc. of Toronto said Tuesday that it will buy publicly traded SEDA, which has 450 employees, for $29 a share, a 32% premium over Monday's closing stock price of $22 a share.

CCL, with 6,700 employees and more than $1 billion in sales, said it will expand SEDA's operations, which currently consist of a manufacturing plant in Compton and a smaller one in Plattsburgh, N.Y.

SEDA, which projects $70 million in sales this year, makes plastic tubes, jars and bottles for such major retailers as Avon, Victoria's Secret and Banana Republic.

"Now we have the ability to go global," said Shawn Sedaghat, 31, chairman and CEO of SEDA, who will continue to lead the SEDA packaging business. SEDA's Compton work force will grow 20% within the next year, he added, and he predicted future acquisitions.

"What big companies want to see among critical suppliers like a packaging company is scale. Now SEDA has scale," said Fredric M. Roberts, president of the Los Angeles investment banking firm F.M. Roberts & Co., which served as SEDA's advisor.

The company, formed in 1984 by Shawn Sedaghat's father, Shapour Sedaghat, has grown steadily. In 1993, San Francisco investment banking firm Sutro & Co. took the company public at $14 a share.

But after some disappointing earnings, the firm's stock began to slide and by 1995 posted lows of $6 to $7 a share. The company eventually hired investment banker Roberts to find a way to kick-start it back into growth mode.

"This company has been prevented from growing by the doldrums of its stock price," said Alfred E. Osborne Jr., a director at SEDA.

SEDA's stock rose $6.50 a share in Nasdaq trading on Tuesday, closing at $28.50 a share.

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