OC Oerlikon Corp., a Swiss machinery producer, will get a 470 million-franc ($495 million) cash boost from the sale of its natural-fibers business to Jinsheng Group, cutting its reliance on the textile industry.
The company said it will keep its artificial-fibers business, which makes spinning machinery for nylon and polyester, as those products are less sensitive to economic cycles.
“The closing of this transaction marks an important milestone in the reshaping of our portfolio, and it further strengthens our financial profile for investments in inorganic and inorganic growth opportunities,” interim Chief Executive Officer Juerg Fedier said in a statement. The sale to the Chinese company was announced in December.
Oerlikon, whose Saurer unit delivered its first embroidery machine in 1869, is letting go of a business with sales of about 1 billion francs and 3,800 employees as it focuses on more profitable activities such as coatings for airplane and car parts. The strategy, spearheaded by former chief Michael Buscher, who left in March, is being continued by Chief Financial Officer Fedier as Oerlikon seeks a permanent CEO.
The stock rose 1.8 percent to 11.50 francs at 9:04 a.m. in Zurich. The shares have gained 39 percent in the past year.
The head of the textile unit, Clement Woon, will leave Oerlikon, and the man-made fibers unit will be headed by 57-year-old Stefan Kross, who has been with Oerlikon since 1990.
Oerlikon has also been exploring strategic options including a possible sale of its Advanced Technologies unit with sales of 103 million francs last year, people familiar with the matter said in June. That business makes manufacturing equipment for semiconductor components and optical disks.
Oerlikon gained natural-fiber machinery and textile-component businesses in 2006 when it agreed to buy Saurer AG in a 1.32 billion-franc deal led by Austrian investors Ronny Pecik and Georg Stumpf, the controlling shareholders at the time.