Transamerica to Spin Off Unit to Shareholders

Transamerica, an insurance and financial services concern, said Monday that it will spin off its manufacturing subsidiary to Transamerica’s shareholders to complete a previously announced restructuring.

Holders of Transamerica common stock will receive one share of the manufacturing unit for every 10 shares of Transamerica they own on Dec. 18, the record date for the transaction.

The manufacturing unit has been renamed Imo Delaval Inc. and is expected to trade initially on the New York Stock Exchange at a discount from its book value, which is assets minus liabilities. The book value was said Monday to be $27.50 per share. Imo Delaval will have 7,328,128 shares outstanding after the spinoff, giving the transaction a book value of $201.5 million.

(Imo is the brand name of a pump made by the company, which was previously known as Transamerica Delaval.)

Imo Delaval, based in Lawrenceville, N.J., has 4,000 employees and operates 27 plants in the United States, Canada and Europe. It sells pumps, turbines, instruments, controls and engineering products and services.

In the nine months ended Sept. 30, the manufacturer posted a net loss of $8.9 million on revenue of $266 million. The loss included $27 million in non-recurring charges.

Transamerica opted for a spinoff because potential buyers were not willing to pay what Transamerica felt the unit was worth, a spokesman said. Selling the company for less than its book value would have forced Transamerica to recognize a loss on the transaction.

Earlier this year, Transamerica sold Budget Rent a Car for $205 million plus warrants as part of the restructuring program; it also began liquidating Transamerica Airlines by selling nine aircraft for $291.5 million.

James R. Harvey, chairman and chief executive, said Monday that “all of these actions strengthen Transamerica’s position for the planned expansion of our insurance and financial services businesses.”