SSL International P.L.C. has learned the hard way to live and survive in an atmosphere of rumors and speculation.
So it shouldn't be too difficult for the rubber latex medical glove and condom maker to operate amidst the latest report-that an unspecified company is attempting to purchase the London-based firm.
SSL officials acknowledged July 14 that they have had acquisition discussions with at least one company. Chairman Ian Martin passed that information along to shareholders at the company's annual meeting July 15. Few were surprised, however, because of speculation that surfaced before the announcements.
Reports out of England July 22 indicated those discussions had hit snags and eventually may come to nothing. Companies rumored to be interested in buying SSL include:
c Reckitt Benckiser P.L.C., headquartered in England, partially because the household product giant apparently is interested in pursuing acquisitions in the health and personal care market;
c Dallas-based conglomerate Kimberly-Clark Corp., a producer of latex and synthetic latex medical gloves through its Safeskin division; and
c Boots Group P.L.C., a global pharmacy giant based in England, primarily because of SSL's over-the-counter goods.
Spokesmen for both Kimberly-Clark and Reckitt Benckiser said the companies don't comment on rumors or speculation. Boots didn't return phone calls.
Despite the new distraction, Chief Executive Brian Buchan and other company officials have pledged to keep their eye on the firm's development and reorganization.
That includes the sale of London-based SSL's medical division, which features the Regent rubber latex and synthetic latex glove line. The segment was put on the block in late March. The company also has its Marigold industrial and household glove business up for sale.
The company said it wanted to focus on its core units, including condoms and foot care products. Ironically, it was just a year ago that medical products were considered in that group.
``As a result of a thorough review your board (of directors) decided that the best way forward is to focus all our efforts on exploiting the exceptional brands and capabilities we have in the consumer health care side of SSL and to divest our medical business,'' Martin said when the medical goods segment was put up for sale in late March. ``Our new strategy is simple: build on brands and grow sales, develop new products and cut costs to meet and beat industry benchmarks.''
In mid-July, shortly after he confirmed the company had an interested suitor, he said the disposal program ``is well advanced and on course. The cash we get from these sales will be used to reduce the group's borrowings, which will, in turn, give us flexibility to grow the consumer side of the business.'' He did not name potential buyers.
Shareholders and employees have learned that change is the norm at the firm. It has been that way since SSL was formed by the merger of Seton Scholl Healthcare P.L.C. and London International Group P.L.C. in 1998.
SSL began closing its U.S. manufacturing operations and consolidating production of gloves and condoms in Asia in 2000. The transition continued through 2001, when it sold its continence care business unit, expanded its Malaysian and Thailand facilities, closed two factories in England and built a 170,000-sq.-ft. manufacturing plant in the country.
That also was the year the company admitted its sales had been inflated by trade loading-stuffing distribution channels with product stock to meet year-end goals. Trade loading is legal but an internal investigation into how customers had accumulated the excess stock led to a probe by the Serious Fraud Office in England into inflation of SSL's profits in 1999 and 2000, which is a crime.
Company officials survived that scandal by admitting their errors and righting their wrongs. But that management unit was replaced by a new one that began cleaning house.
``The achievements of the new management team that arrived in 2001 are extraordinary,'' a spokesman said. ``It discovered the company was in worse shape than they were aware,'' including the practice of trade loading, high overhead and a manufacturing base that needed rationalization.
The new team, led by Buchan, sorted out the trade loading problems, launched another restructuring program, cut costs, revamped marketing and led the firm back to profitability, he said. SSL's sales rose 5 percent to about $1.04 billion while operating profit jumped 51 percent to almost $138 million in the fiscal year ended March 31.