Swedish Firm Buys Xytec

TACOMA

Battered by the national recession and slowdown in car sales, Xytec Inc. found possible redemption yesterday in its acquisition by the Swedish company Perstorp AB.

Xytec's 150 shareholders approved Perstorp's tender offer to buy 98 percent of Xytec's outstanding common and preferred shares. In return, Perstorp will inject millions of dollars into the plastics maker, allowing the company to expand and buy new capital equipment.

"(Acquisition) never solves all your problems, but its solves several of them," says Duane Anderson, Xytec's chief financial officer. "Perstorp is a substantial company, not only in money, but in technical support. This will allow us to grow and expand."

"Perstorp is a substantial company, not only in money, but in technical support. This will allow us to grow and expand."

Perstorp is a diversified Swedish company that had $1.2 billion in sales last year and 7,600 employees in 14 countries. Xytec, located in the Lakewood Industrial Park, will become part of Perstorp's plastics group and will be renamed Perstorp Xytec Inc.

Xytec was established here 85 years ago as a maker of wooden cabinets. It began molding plastic about 20 years ago and now makes returnable plastic shipping containers for the automotive, appliance and food industries.

Lately, however, Xytec has fallen on hard times.

Declining automotive sales have bitten into Xytec's business with car manufacturers. Local customers, such as Paccar and Bayliner Marine Corp., have had their own problems and have cut Xytec orders as well, Anderson says.

Xytec laid off a third of its work force in October, cutting its employee base to about 100. Revenue, about $20 million in 1989, dropped to $15 million last year. The company experienced a $300,000 loss for all of 1990, and reported a $400,000 loss for the first quarter ended March 31.

Perstorp had been courting Xytec for almost four years, looking for an inlet into the U.S. market. In February, Xytec announced it would begin making and selling Perstorp products in the U.S. Perstorp has been selling Xytec products in Europe since 1983. Perstorp's acquisition of Xytec makes Perstorp one of the largest makers of plastic handling material for industrial users.

"Xytec gives us a good base for focusing more actively on this attractive market," said Wiking Henricsson, Perstorp Plastic Systems president.

Anderson would not disclose how much money Perstorp will infuse into Xytec for new tooling and plastic molds. Xytec will expand, he said, but not necessarily in Tacoma.

Spencer Hoopes, Xytec president and chief executive, will remain on the company's board of directors, but other members have been replaced by Perstorp directors.