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PGI board mulls options, announces VA investment.

The board of directors of Charlotte, NC-based nonwovens producer PGI is evaluating strategic alternatives to unlock shareholder value created by the company's strong performance in fiscal 2009, its continued investment in growth initiatives and its significant improvement in financial flexibility.

The strategic alternatives could include, among other things, the sale, merger or recapitalization of the company. These actions are also the result of the company's desire to provide its existing stockholders with liquidity alternatives. The company has not set a definitive timetable for completion of its evaluation and there can be no assurances that the process will result in any transaction being announced or being completed. The company does not intend to disclose developments regarding this process unless and until the board of directors has approved a specific transaction.

Private equity firm MatlinPatterson owns 65% of the company, according to Reuters data, picking up its controlling stake when PGI emerged from bankruptcy in 2003. It has a market capitalization of about $350 million. Sales were reported at just over $880 million in 2009.

In other news, PGI will invest a reported $65 million to expand its Waynesboro, VA facility. The investment will include the purchase of high-technology equipment to establish a new manufacturing line and increase production as well as the expansion of the current building in order to accommodate the new line. The project will also create 41 new jobs.

"An investment of this magnitude and the creation of 41 new jobs is important for Waynesboro and important for the manufacturing sector in Virginia," said Virginia governor Bob McDonnell. "PGI has experienced success in the Commonwealth, and this planned expansion enables the company to increase both production and product capabilities with state-of-the-art new equipment. The project ensures that PGI will continue to build on its progress in Waynesboro."

Virginia successfully competed against North Carolina for the project.

"This planned expansion in product capability and capacity is part of PGI's ongoing strategy to provide superior solutions to the marketplace and meet our customers' needs," said PGI CEO Veronica Hagen. "The efforts of the Virginia Economic Development Partnership and local Waynesboro officials to address and meet our unique needs through their combined incentives package have allowed us to make this planned expansion possible in Waynesboro."

The Virginia Economic Development Partnership worked with both the City of Waynesboro and the Shenandoah Valley Partnership to secure the project for Virginia. Delegate Steve Landes also assisted with the project. Governor McDonnell approved a $750,000 grant from the Governor's Opportunity Fund to assist Waynesboro with the project. Governor McDonnell also approved $750,000 in a performance-based grant from the Virginia Investment Partnership (VIP) program, an incentive available to existing Virginia companies. The Virginia Department of Business Assistance will provide new job training assistance through the Virginia Jobs Investment Program.

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Title Annotation:Nonwovens News; Virginia Economic Development Partnership
Comment:PGI board mulls options, announces VA investment.(Nonwovens News)(Virginia Economic Development Partnership )
Publication:Nonwovens Industry
Geographic Code:1USA
Date:May 1, 2010
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