Drexel Figure Gains Control of UTI Chemicals
Terren S. Peizer, a former securities salesman with Drexel Burnham Lambert, said Tuesday that he has acquired control of an Irvine plastics company for $1 million.
The plastics company, UTI Chemicals Inc., is a polyurethane wholesaler that researches and develops new uses for polyurethane.
The Securities and Exchange Commission released details Monday of an agreement in which Peizer’s company, Financial Group Holdings Inc. in Los Angeles, paid $1 million for 6.03 million UTI shares and a one-year option to buy another 3.13 million shares at 11 cents a share, which would give him a 31% stake.
Peizer, who sat next to Michael Milken in Drexel’s junk bond department in Beverly Hills, was a prosecution witness at Milken’s court hearing in October.
The agreement calls for Peizer’s selection as chairman and gives him control of four of UTI’s six board seats. It gives him, for five years, first right to purchase any shares sold by the company’s five major stockholders.
Peizer said Tuesday that he did not want to discuss his plans for the company. “It’s a little company,” he said. “It’s a fraction of what I’m doing today.”
UTI officials declined comment on the sale.
UTI signed a pact in September, 1988, with Goodyear Tire & Rubber Co. of Akron, Ohio, to perfect solid plastic tires for cars. Goodyear spokesman David Russ said UTI has produced several prototypes of the tires.
Goodyear and UTI have worked together to create other products besides tires. Russ said UTI’s plastic, polyether urethane, is already competing with another plastic, polyester urethane, used in dashboard covers, bumpers, steering wheels and other automobile parts.
UTI has made a solid tire for heavy-duty industrial use, which Goodyear uses for forklifts and other heavy equipment. The tires never go flat, need no repairs and cost less to make. But no company, so far, has come out with a plastic tire for passenger cars that can withstand extreme heat and hard turns and still give a comfortable ride.
In UTI’s most recent filing with the SEC, it listed operating losses of $129,000 on revenue of $1.67 million for the first nine months of 1990.
The company blamed its losses on a slowdown in the construction industry in California, for which it supplies liquid polyurethanes that are used in cement molds and foam insulation, among other materials.
In the same quarterly report, UTI said the most promising of its existing markets are replacement automobile parts and sporting goods. It said it had recently signed an agreement with Nordica SPA of Montebelluna, Italy, to develop a way to make ski boots with liquid polyurethane, which could be faster and allow boots to retain their bright colors longer.
