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LAST TRACE OF HERCULES IN UTAH IS SET TO DISAPPEAR

SHARE LAST TRACE OF HERCULES IN UTAH IS SET TO DISAPPEAR

The last vestige of a lengthy presence in Utah by Hercules Inc. is about to end with the announcement that Hexcel Corp., Pleasanton, Calif., has made a $135 million offer to purchase Hercules' Composite Product Division in Magna.

The company expects to complete the transaction before June 30, and it will depend on obtaining antitrust and other regulatory clearances. The division has 320 employees in Utah and 470 world-wide.It makes carbon fiber and resin-impregnated woven fabrics used in structural parts for a variety of aerospace applications. The division has other facilities in Decatur, Ala., and Madrid, Spain.

Hercules has been in Utah since early in this century, first as a dynamite manufacturer and later as a rocket motor propellant maker in addition to other defense work. Thirteen months ago Minnesota-based Alliant Techsystems acquired Hercules' aerospace operation in Utah, leaving only the composite product division.

Late last year, Hercules announced it was getting out of the composites business to devote more time and resources to development of additives for food and cosmetics, in addition to some waterproof resins.

Fiberite Holdings Inc. of Tempe, Ariz., made a $135 million stock-cash offer, but the companies failed to reach an agreement in February and Hercules continued to look for a buyer. John Bailey, human resource director for the division, said the sale probably won't affect any employees.

In connection with the proposed transaction, Hexcel has entered into a commitment letter with Credit Suisse for a fully underwritten $300 million loan with the money to be used to purchase the division, refinance existing indebtedness and general corporate purposes.

R. Keith Elliott, president and chief operating officer of Hercules, said the sale of the division is a win-win situation for both companies. "For Hexcel, the CPD products and carbon fiber manufacturing adds to Hexel's product portfolio. For Hercules, the sale unlocks shareholder value and allows us to concentrate our resources on our strategic franchises," he said.