Wednesday, August 9th, 2006
Celina plant's future unsure
By Timothy Cox
It is too soon to determine the exact effect the merger of Reynolds & Reynolds Co. and Universal Computer Systems will have on the company's Celina production facility.
"At this time, I don't know. It's very early in the integration process," Reynolds spokesman Mark Feighery told The Daily Standard this morning.
Local officials say they are confident the Celina plant will remain a vital part of the realigned company.
Dayton-based Reynolds and Texas-based Universal Computer Systems announced Tuesday plans for the Texas company to acquire Reynolds in a $2.5 billion buyout. The new company will still be called Reynolds and will operate from the Dayton headquarters.
Both companies specialize in business documents, mostly for the automotive industry. The merger is expected to be voted on by shareholders later this year. Reynolds' top executives have agreed to vote their shares in favor of the deal.
Mercer County Community Development Director Larry Stelzer said he believes the merger will create a stronger company. Stelzer said after discussing the deal with Reynolds' corporate officials and people at the Celina plant, he believes there will be no ill effects locally from the corporate merger.
"As a whole company, this is great for them and we don't expect it to affect the local plant one bit," Stelzer said.
According to Mercer County records, 500 people are employed at Reynolds' manufacturing facility in Celina. Another 1,600 or so are employed at the company's headquarters in Dayton and at other plants around the world.
Feighery said no decisions have been made about individual production plants, but said the Celina operation is a vital part of the company's structure.
"Celina is a very important part of Reynolds and Reynolds," Feighery said. "It's one of the things about the company that is very attractive."
Under the agreement, Universal Computer Systems will pay $40 for each outstanding share of Reynolds, a 14 percent premium from Monday's close of $35.08 on the New York Stock Exchange. Reynolds shares rose $3.86, or 11 percent, to $38.94 in trading on the New York Stock Exchange. The stock hit a 52-week high of $39.20 during the day.
In addition, Universal Computer Systems would assume $300 million in Reynolds debt.
Universal Computer Systems will pay for the deal with a combination of equity mainly from a group of investors. Debt financing will come from Deutsche Bank and Credit Suisse.
- The Associated Press contributed to this story.