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Ohio Company to Divest O.C.'s Interstate Electronics

Sale: Though profitable, Anaheim military products firm no longer fits business plan of Scott Technologies.

October 23, 1998|JOHN O'DELL | TIMES STAFF WRITER

The Ohio-based owner of Interstate Electronics Corp. said Tuesday it plans to sell the Anaheim company, which manufactures guidance systems, electronic instrumentation and satellite-based navigation systems for the military.

Interstate, which posted about $90 million in annual sales and employs 590 people, no longer fits into the business plan of owner Scott Technologies Inc., a Scott spokesman said.

Scott is concentrating on its line of lifesaving products for the aerospace, military, industrial and fire-fighting markets.

"Divesting IEC will allow us to unlock for our stockholders the significant value of our Scott franchise," said Glen Lindemann, Scott's president and chief executive.

Scott spokesman Rob Berick said the Cincinnati-based company plans to retain an investment banking firm to help find a buyer for Interstate.

He said the 42-year-old Anaheim military electronics firm is profitable and recently underwent a reorganization in which a number of commercial product lines were dropped to enable it to focus on its military business. About 150 jobs were cut in the restructuring.

Scott, which acquired Interstate in 1962, expects to take an after-tax charge of $6 million to $7 million in the third quarter to account for the costs of the electronics firm's reorganization and said that the write-off will result in a loss for the quarter.

The company hopes to complete a sale of Interstate next year.

Scott Technologies has two classes of stock, both traded on the Nasdaq market. Its class A shares rose 63 cents Thursday to close at $12, while class B shares gained 50 cents to close at $11.75.

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