Celotex Corporation Business Operations To Get New Owners.

TAMPA, Fla., June 2 /PRNewswire/ --

Celotex Corporation, a manufacturer of residential and commercial building materials, announced today that it has accepted an offer for two of the company's five business operations, which combined account for approximately 50 percent of the company's revenue. In addition, the company also announced that it has entered into a Letter of Intent and is negotiating a definitive agreement to sell a third business operation that accounts for about 25 percent of the company's revenue. The remainder of the company's operations continues to be marketed to potential buyers.

The transactions include:

* Ceiling Products and Gypsum Wallboard: BPB plc (BPB) of the United Kingdom, the second largest producer of wallboard in the world and the largest outside the United States, is purchasing Celotex's ceiling products and gypsum wallboard business operations. These operations include 12 manufacturing facilities and account for approximately 50 percent of Celotex's overall revenue. The purchase will allow BPB to expand its U.S. market by establishing a U.S. operation in gypsum and ceiling products. Current BPB North American gypsum operations are part of Westroc Inc., headquartered in Toronto, Canada.

* Roofing Products: The company has signed a Letter of Intent and is negotiating with CertainTeed Corporation of Valley Forge, Pa., for the purchase of Celotex's roofing products business operations, which include five manufacturing facilities, accounting for about 25 percent of the company's revenue. Subject to the execution of a definitive asset purchase agreement, a sales announcement could be made within a very short time period.

* Insulation: The rigid foam-based insulation and sheathing business, which includes 5 manufacturing plants and accounts for about 20 percent of Celotex's operations, is currently being marketed to a number of potential buyers.

* Fiberboard: At present, a buyer is still being sought for Celotex's fiberboard operations (5 percent of current revenue with two manufacturing facilities).

The sale of Celotex's various operations culminates a process that began in November 1999, when Celotex President and Chief Executive Officer, John P. Borreca, announced that the Trust was seeking a buyer or buyers for the company. "When we began the company sale process last year, our hope was that we could find a new owner interested in paying full value and acquiring the entire company," said Borreca. "As it turns out, after a very broad and public auction process, the marketplace has told us the highest value for our company is in the sum of its parts, rather than in the whole."

Borreca believes the majority of the 2,200 jobs at the company's 24 manufacturing plants and 11 sales offices will be preserved. Jobs are at risk, however, for many of the 300 administrative employees at the Celotex headquarters location in Tampa and the Technical Research Center in St. Petersburg. It is unclear at this time if any Tampa Bay area operations are planned by an acquiring company.

The announced sales are expected to occur within the next 30 to 45 days, subject to any possible regulatory issues. Operations in the Tampa Bay area will continue for up to six months or more. This time period depends upon negotiations for the remaining operations of Celotex, as well as current discussions with the new owners for continuing administrative support during the transition period.

Beginning in the late 1970s, while a subsidiary of the Jim Walter Corporation, Celotex was named in a series of lawsuits regarding its predecessor Panacon's use of asbestos in some products. Celotex was forced to file for protection under Chapter 11 bankruptcy. In 1997, upon the effective date of the Bankruptcy Court-approved reorganization plan for the company, ownership of Celotex was transferred to the Asbestos Settlement Trust, which today owns 100 percent of Celotex's stock. "The Trust is no different than any other owner seeking to maximize the value of its investment," Borreca said at the time the search for a buyer was announced.

Celotex Corporation is a major manufacturer of building materials for domestic and international commercial and residential markets. The company manufactures gypsum wallboard, rigid foam insulation, premium residential asphalt roofing shingles, and acoustical ceiling and fiberboard products. In fiscal year 1999, which ended August 31, 1999, gross sales were approximately $600 million. The company employs approximately 2,500 persons and operates 24 manufacturing facilities located throughout the United States.