Garden Grove Company Bought for $42.3 Million : Swedlow Shareholders OK Sale to British Firm

Shareholders of Swedlow Inc. voted Thursday to sell the Garden Grove glass and plastics company to a subsidiary of giant British-based Pilkington Brothers PLC for $42.3 million, or $32.60 a share plus $1.8 million for existing stock options.

Shortly after the vote, Pilkington representatives filed documents with the California secretary of state to make the acquisition official.

Nearly 79.5% of Swedlow’s 1.24 million shares were voted in favor of the merger, while 20.3% of the shares were not voted.

Swedlow, its management and its 770 employees will continue to operate in Garden Grove as a subsidiary of Solec Holdings Inc., a company Pilkington set up in Toledo, Ohio, to help effect the merger.

The acquisition ends 16 months of attempts by Chairman David A. Swedlow and his former wife to sell their 49% interest in the company in a deal that would guarantee other shareholders the same price.

Closed at $32 a Share

Swedlow’s common stock closed at $32 per share in light over-the-counter trading Thursday. Previously, the company’s stock had sold at $30 per share only once since the initial public offering in 1971, and that high occurred only when plans to be acquired by PPG Industries Inc. were announced in August, 1985. The Federal Trade Commission subsequently sued PPG to block the merger, saying the acquisition would lessen competition in the making of aircraft windshields, Swedlow’s specialty.

After a court sided with the FTC on a procedural issue in August, ensuring a long delay, Swedlow’s directors decided to dump PPG in favor of Pilkington, which was one of two other companies bidding against PPG for Swedlow last year.

Shareholders were anxious to close the deal before the end of the year in order to take advantage of current tax law, which treats their income from the sale more favorably than the new federal tax law will, a spokesman for the company said.

Pilkington, a 160-year-old glassmaker, has 37 subsidiaries in 16 countries. In March, it purchased the glass division of Libbey-Owens-Ford Co. in Toledo for a reported $355 million in cash and stock. Pilkington’s annual profits in recent years has ranged from $158 million to $174 million on sales of $1.8 billion to nearly $2 billion.

Swedlow, which is acknowledged to have one of the world’s superior technologies in the manufacture of acrylic transparencies, usually used as jet-fighter canopies, posted net income of $1.4 million on revenues of $54.7 million for its fiscal year ended March 30.