Only months after Langer sold its Bi-Op subsidiary for less than its purchase price, the company announced the sale of its custom orthotics business to The Orthotic Group (TOG), a manufacturer of prescription custom foot orthotics, orthotic footwear and gait analysis equipment. TOG paid approximately $4.7 million in cash at closing. The deal includes Langer’s Deer Park, NY facility as well as its sales office in Markham, Ontario.
Net proceeds, after transaction costs, are $4.1 million. Langer expects to recognize a minimal gain on the sale.
The selling is part of Langer’s stated strategy of simplifying the company’s business and reducing corporate and compliance expenses. As part of this effort, Langer divested its UK subsidiary to Sole Solutions for $1.2 million in cash and notes.
2007 was a challenging year for the company; Langer seems to have lost focus in an attempt to grow aggressively. While the company’s Silipos subsidiary performed well, its newly acquired Twincraft and Regal businesses did not. Blame the economic downturn, perhaps. The cost of maintaining these businesses on a corporate level remains high relative to profits.
Twincraft and Silipos offer a diverse line of bar soap and other skincare products for the private label retail, medical and therapeutic markets.
