Genmar creates VEC spin-off company

MINNEAPOLIS, Minn. – Genmar Holdings, Inc. announced today the successful spin-off of its VEC Technology business into a new stand-alone entity. The newly created company’s official name is VEC Technology, and based upon the completed transaction, its value approximates $350 million.

VEC LLC will be owned and operated as a stand-alone company with several strategic investors and partners, Genmar’s press release said. Interplastic Corporation – a St. Paul-based manufacturer of polyesters resins, vinyl ester resins, gel coats and molding compounds, and a national distributor of all composite materials such as polyester resins and fiberglass – became the initial strategic partner and investor with Genmar in VEC LLC. Interplastic Corporation’s Thermoset Resins Division will be the exclusive supplier of resins to VEC LLC and its North American Composites division, its distributor of most composite products.

All VEC-produced products will exclusively and extensively use such materials, according to the release. Over the next 60 to 90 days, Genmar says there will be several additional strategic partners and investors, who will also become equity holders and strategic suppliers to the company.

“Genmar’s development and application of VEC technology for Genmar’s boat manufacturing companies has always been our initial strategic focus,” Genmar chairman Irwin Jacobs said. “The VEC process for boat building was successfully commercialized with the addition of a new state-of-the-art, 100,000-square-foot VEC boat manufacturing facility in Little Falls, Minn. Our Little Falls VEC plant has successfully built in excess of 20,000 VEC boats without a single structural failure.

“The additional capital infusion associated with this transaction will enable VEC LLC to focus on its huge global business opportunities, as well as enable Genmar to concentrate on its marine business. The next generation of VEC, a thermoplastic gel coat replacement called the VEC-Shield finish, will be launched through several of Genmar’s boat companies in late 2004 and 2005.

“During 2004, Genmar will begin to expand and build new facilities to house the first new VEC-Shield equipment and machinery for building boats. GE Plastics and Spartech Corporation of St. Louis, are partners who have participated and continue to assist in developing the VEC-Shield finish. Spartech has designed and ordered the larger equipment necessary to produce the specialized thermoplastic sheet used by Genmar in its VEC-Shield boats. GE will supply their Geloy resin materials for use in the VEC-Shield finish.”

“VEC technology is clearly a proven game-changing technology that will in fact dramatically change the composite manufacturing industry,” said Interplastic Chairman and Chief Executive Officer, James D. Wallenfelsz. “In our opinion, VEC is by far the most significant and advanced process development for the manufacture of large fiberglass parts in decades.”

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