Continuing to reduce its indebtedness, Intermark on Monday sold its Dynamark automotive wheel-making subsidiary to a newly created limited partnership for $20 million in cash.
Intermark will retain principal ownership of the automotive wheel-making company, however, through a newly created subsidiary that will own more than 50% of Dynamark Ltd., a partnership that includes members of the Dynamark management team led by president and chief executive Craig D. Crisman.
“The sale price was closer to $22 million but we put some money back into the company,” said Frank C. Alexander, Intermark’s vice president and chief financial officer, who described the purchase price as “slightly in excess of book value.”
Earlier this month, in another debt-reduction move, Intermark sold $22 million worth of common stock it had acquired as an investment in Square D, an Illinois-based electronics and electric products maker.
“Our (short-term) bank debt is totally paid off now,” Alexander said. “Our goal this past year has been to reduce our bank debt and leverage. These last two (transactions) have helped us to do that.”
Intermark was built through acquisitions, but the company “has nothing imminent” in the way of major acquisitions, Alexander maintained Monday. He added that the company has been developing two “relatively small acquisitions, neither of which is close to closing.”
Dynamark, a manufacturer and distributor of custom wheels that generates 90% of its business in the replacement market, will continue to operate from its headquarters in Ontario. The company will also maintain manufacturing plants in Ontario, Harbor City, and Mexicali, Mexico, that employ a total of 895 people.
Dynamark reported a $668,000 pre-tax loss on revenues of $63.5 million for the fiscal year ended March 31. That compares to $4.1 million in pre-tax earnings and $64.8 million in revenues for the prior fiscal year.
However, Dynamark, which is on track toward $60 million in annual revenues for the year ending March 31, 1986, likely will report a profit for the year, according to Alexander.