Leggett sells Prime Foam operations

The Prime Foam division produces foam used for cushioning for upholstered furniture and bedding manufacturers. Leggett will keep its foam operations that manufacture carpet underlay.

In 2006, the Prime Foam division brought in $200 million in revenues, making it the largest divestiture in Leggett’s history.

“Although the business is performing well and has some opportunity for growth, our market position is small and the business is not strategic to Leggett,” CEO and President David Haffner said in a news release. “We will continually evaluate the strategy and competitive positions of our individual businesses, and plan to participate only in markets in which we can be a market leader and generate an attractive cash flow return on investment.”

Leggett expects a pre-tax gain from the sale of $24 million, or 6 cents per share, according to the release. The divestiture also is expected to reduce the company’s full-year operating earnings by 4 cents per share, creating a net impact on 2007 earnings of a 2-cent-per-share increase, according to the release.