ACX to Separate Graphic Packaging, Coors Ceramics

Folding carton producer ACX Technologies Inc. (Golden, CO) plans to spin off its Coors Ceramics Co. division to shareholders. Following the spinoff, ACX will continue to operate its Graphic Packaging Corp. subsidiary, positioning ACX as a pure-play packaging company.

"Our decision to separate Coors Ceramics Co. and Graphic Packaging Corp. will allow sharper management focus on core competencies and will support future growth through dedicated resources and improved access to debt and equity markets," said Joe Coors Jr., co-chief executive of ACX Technologies and CEO of Coors Ceramics.

Coors Ceramics, which deals with advanced technical ceramics and other engineered materials, had 1998 revenues of $296.6 million and operating income of $40.7 million. It will become a separate, publicly traded company.

Under the proposed spin-off plan, 100% of the shares of Coors would be distributed to ACX shareholders in a tax-free transaction, the company said.ACX said it expects Coors Ceramics to have approximately $200 million in debt after the spin-off, which is subject to regulatory approvals and a favorable IRS ruling. While the ACX board has given tentative approval to a spinoff, it must still give final approval. The spinoff could take place by the end of this year.

Joe Coors will remain chairman and CEO of Coors Ceramics, and John Coors will continue as president. A chief financial officer has yet to be appointed.

1998 annual revenues for Graphic Packaging reached $623.9 million and are expected to be over $1 billion in 1999, ACX said. Operating income in 1998 was $59.5 million, before special charges.

Jeff Coors will remain chairman and CEO of Graphic Packaging. David Scheible was recently named COO, and Gail Constancio will continue as the company's CFO.