Gelsenkirchen, Germany -- Masterflex AG has sold its subsidiary Dicota GmbH, which makes laptop bags, cases and other accessories for mobile computing, for as much as Euro 13.6 million ($19.2 million). The sale is part of Masterflex's strategy to focus on its "profitable core business of high-tech hose systems," the company said in its 16 Dec announcement.
After deducting costs and adding repayment of shareholder loans, Masterflex said it stands to gain liquid funds of Euro 15.5 million maximum, which it will used primarily to reduce net debt. Masterflex's board assumes that both liquidity and consolidated EBIT margin will improve during fiscal year 2009 as a result of the sale of Dicota.
According to Masterflex, Dicota offered no synergies with the core business, and its expansion in recent years had a negative financial impact on the Masterflex Group, with Dicota contributing "heavily to the increase in net debt," and adversely affecting cash flow.
"The rapid expansion of High-Tech Hose Systems will be at the forefront of all activities in the next few years," said Dr Andreas Bastin, ceo of Masterflex AG, in the company statement.
"An examination of the soundness and potential for synergy for the core business takes top priority in all activities; the very high profitability of High-Tech Hose Systems is expected to spread throughout the group as a whole, thereby increasing goodwill over the long term," Bastin continued.
Had Dicota remained with the group, Masterflex said, it would have had to initiate a complete reorganisation: Masterflex believes that the buyer, with "proven long expertise in this market segment, will be better able to guide this process."