UFP Technologies Sells Molded Fiber Business to CKF, Inc.

Rhea-AI Summary

UFP Technologies, Inc. (Nasdaq: UFPT) announced the sale of its molded fiber business, Moulded Fibre Technology, Inc. (MFT), to CKF, Inc. for approximately $32 million. This strategic divestiture is aimed at reallocating resources to enhance its MedTech segment, which now constitutes 82% of UFP's revenue. MFT, acquired in 1993, reported an annual revenue of $21.3 million in 2021. The sale is expected to provide synergies for MFT under CKF, focusing on molded fiber products, while UFP pursues growth opportunities in the medical market.

Positive

• Sale of molded fiber business for approximately $32 million.
• Reallocation of resources to the growing MedTech sector, now 82% of revenue.
• MFT's annual revenue was $21.3 million in 2021.

Negative

• None.

NEWBURYPORT, Mass., July 27, 2022 (GLOBE NEWSWIRE) -- UFP Technologies, Inc. (“UFP”) (Nasdaq: UFPT) today announced the sale of its molded fiber business and related real estate in Iowa to CKF, Inc. for approximately $32 million.

“Moulded Fibre Technology, Inc., or MFT, has been a valued part of the UFP family for many years,” said R. Jeffrey Bailly, Chairman and CEO of UFP Technologies. “It’s difficult to part with such a great business and talented team. However, this strategic divestiture frees up resources – both people and capital – to further grow our MedTech business, which now represents 82% of our revenue. CKF’s strategic focus on molded fiber brings numerous synergies to MFT and will give its customers access to a wider range of products, technologies, and manufacturing locations.”

Founded in 1991, MFT was a pioneer in the development of “molded pulp” packaging using only water and recycled newspaper. UFP Technologies acquired MFT in 1993 and grew to become one of the largest producers of molded fiber packaging in North America. UFP has long been the supplier of choice for many leading consumer brands seeking the highest quality, environmentally-friendly protective packaging. MFT’s annual revenue was approximately $21.3 million for the year ended December 31, 2021.

UFP Technologies is an innovative designer and custom manufacturer of components, subassemblies, products, and packaging primarily for the medical market. Utilizing highly specialized foams, films, and plastics, we convert raw materials through laminating, molding, radio frequency welding, and fabricating techniques. We are diversified by also providing highly engineered solutions to customers in the aerospace & defense, automotive, and industrial markets.

CKF Inc. is a diversified Canadian-owned manufacturer that proudly offers a wide range of molded pulp, foam, and PET products to meet the specific demands of retail consumers, food service operators and the packaging industry. CKF is a member of the Scotia Investments Family of Companies, whose core values include long-term stewardship, environmental integrity, and community well-being.

Forward Looking Statements
This press release contains statements relating to expected future business plans that are forward-looking statements, including statements relating to the anticipated benefits to UFP of the sale of MFT. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could adversely affect our business and prospects, and otherwise cause actual results to differ materially from those anticipated by such forward-looking statements. Such risks and uncertainties include, without limitation, UFP’s ability to successfully deploy any resources realized as a result of the sale of the MFT business, as well as other risks and uncertainties that are detailed in the documents we file with the Securities and Exchange Commission (the “SEC”). Accordingly, actual results may differ materially. Readers are referred to the documents we file with the SEC, specifically the last report on Form 10-K. The forward-looking statements contained herein speak only of our expectations as of the date of this press release. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based.

Contact: Ron Lataille
978-234-0926, rlataille@ufpt.com

FAQ

What was the sale price of UFP Technologies' molded fiber business?

UFP Technologies sold its molded fiber business for approximately $32 million.

How does the sale impact UFP Technologies' MedTech business?

The sale allows UFP Technologies to allocate more resources to its MedTech business, which represents 82% of its revenue.

What revenue did Moulded Fibre Technology, Inc. report in 2021?

Moulded Fibre Technology, Inc. reported an annual revenue of approximately $21.3 million for 2021.

Who acquired UFP Technologies' molded fiber business?

CKF, Inc. acquired UFP Technologies' molded fiber business.