Westinghouse Electric Corp. took a step Thursday toward paring down the debt it incurred in buying CBS Inc. by agreeing to sell the Knoll Group, an office furniture maker, for $565 million in cash.
Knoll is being sold to Warburg, Pincus Ventures--an affiliate of E.M. Warburg, Pincus & Co., a New York-based financial services organization.
"Knoll was a bad fit and a wrong fit from the time they bought it," said Greg Drahuschak, a Pittsburgh-based analyst with Janney, Montgomery, Scott Inc., a New York stock brokerage.
"It was no surprise," he said of the news of the sale. "It was expected and logical and the debt pay down is going to be helped by this."
The sale is expected to be completed in the first quarter of 1996.
Westinghouse said Dec. 8 that it planned to sell the defense-related part of its electronic systems group and another unidentified business.
The company said Thursday that Knoll is the second business.
Westinghouse expects the sale of the two businesses to raise more than $3.2 billion to help finance the $5.4-billion acquisition of CBS.
Westinghouse completed the CBS acquisition on Nov. 24.Earlier this month, Standard & Poor's Ratings Group lowered its ratings on about $8.8 billion of Westinghouse debt.
Knoll, which is based in Greenville, Pa., employs about 4,000 people.
In the first three quarters of 1995, Knoll posted operating profit of $37 million on sales of $466 million. That contrasted with a loss of $26 million on sales of $411 million in the same period of 1994.
In trading on the New York Stock Exchange, Westinghouse's stock rose 50 cents to close at $16.38.