Rockwell Sheds Slower Unit

TIMES STAFF WRITER

As part of an ongoing effort to shed its stodgier business units, Rockwell International Corp. said Tuesday it has signed an agreement to sell its Illinois-based Graphic Systems business, which makes newspaper and commercial printing presses.

Under the agreement, Graphic Systems will be sold for about $600 million in cash to a new corporation formed by the New York investment firm Stonington Partners, Rockwell officials said.

The existing management team at Graphic Systems, including a president hired by Rockwell last fall, will also purchase a piece of the new company. The size of that stake hasn't been determined yet, officials said.

Graphic Systems posted sales of $697 million in 1995 and has about 2,800 employees. Company officials said no layoffs are planned.

The pending sale, subject to regulatory approval, is the latest in a series of moves by Seal Beach-based Rockwell over the past decade to recast itself as a high-technology conglomerate.

Graphic Systems "is an excellent business, but doesn't fit into the kind of company Rockwell wants to be in the future," said Terry Francisco, a Rockwell spokesman.

In recent weeks, Rockwell has reportedly begun to consider a sale of its aerospace and defense operations, units that once defined the company but have been elbowed aside in recent years by emerging semiconductor, industrial automation and automotive products divisions.

Rockwell officials refused to comment on the company's plans for its aerospace operations, but Chairman Donald R. Beall has previously said that Rockwell's future will be focused on commercial electronics.

Rockwell has owned Graphic Systems since 1968, but had been publicly seeking a buyer for the unit since January, when company officials said they were already negotiating with several potential purchasers. The deal with Stonington Partners, which will operate the printing press unit under the name Goss Graphic Systems Inc., is expected to close this summer.

Graphic Systems accounted for about 4% of Rockwell's profit and 5% of revenue last year, but the unit's profit levels have tumbled from $121 million in 1991 to $66 million last year.

Graphic Systems' annual sales have also slipped since topping the $1-billion mark in the late 1980s, but have rebounded from a low of $632 million in 1993, said Barbara Gora, marketing director for the company.

Graphic systems "may not offer the kind of high-growth numbers that somebody like Rockwell expects, but it does have decent, stable growth," Gora said.

The new, privately held company will continue to be run by an existing management team headed by Robert Kuhn, who was hired by Rockwell last fall with the understanding that Graphic Systems would soon be sold, Gora said.

The 110-year-old company is planning to unveil several new printing press technologies over the next several years, including a system that uses laser imaging and erasable cylinders for smaller printing runs and quicker changes, Gora said.

Graphic Systems is based in Westmont, Ill., and has U.S. operations in Iowa and Pennsylvania. The company also has overseas operations in England, France, Japan and China.

Stonington Partners is a private equity investment firm that specializes in investing in mature companies. Graphic Systems is the second company Stonington has agreed to acquire since raising a $1-billion fund in March 1995, said Judith Witterschein, a spokeswoman for the partnership.

Last August, Stonington purchased Dictaphone Corp., a maker of voice recording systems, from Pitney Bowes Corp.

Rockwell's stock price closed unchanged at $58.50 per share Tuesday in trading on the New York Stock Exchange.

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Rockwell Sheds Again

Rockwell International Corp.'s latest effort to realign its core business finds the corporation selling its Graphic Systems unit to a New York investment firm. Graphic Systems sales and earnings, though much lower than those achieved in 1991, have been staging a comeback:

Headquarters: Westmont, Ill.

Employees worldwide: 2,800

Other U.S. locations: Cedar Rapids, Iowa; Reading, Pa.

Foreign locations: Preston, England; Nantz, France; Sayama, Japan; Shanghai, China

Products: Offset presses for newspapers and commercial printing

Purchaser: Stonington Partners Inc.

Purchase price: $600 million

Founded: In 1885 as Miehle, Goss & Dexter; acquired by Rockwell in 1968 and renamed Rockwell Graphic Systems. New owners will operate it as Goss Graphic Systems.

Sales (in millions)

1991: $962

1992: $688

1993: $632

1994: $655

1995: $697

Operating Earnings (in millions)

1991: $121

1992: $21

1993: $15

1994: $31

1995: $66

Source: Rockwell International Corp.; Researched by JANICE L. JONES / Los Angeles Times

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