By The Associated Press
NEWARK - A Texas company plans to acquire a controlling stake in a longtime central Ohio basket-making company that has seen sales and employment dip in recent years.
The Newark-based Longaberger Co. and Dallas-based Computer Vision Systems Laboratories Corp., or CVSL, have signed a letter of intent for CVSL to acquire a controlling voting interest in the company known for its handcrafted baskets, home and lifestyle products - including pottery. The companies made the announcement Friday.
Longaberger, which is also known for its iconic basket-shaped home office, celebrates its 40th anniversary this year. It had $1 billion in sales and 8,000 employees in 2000. It now has about $100 million in annual sales, according to the trade publication Direct Selling News, and fewer than 1,000 employees at last count, The Columbus Dispatch reported.
Longaberger President and CEO Tami Longaberger told the company's annual sales force meeting that she intends to transfer her majority share in the company and said in a release that "this is the perfect partnership for us."
She said the acquisition would provide more capital and opportunity for improvements and allow employees to become shareholders.
Longaberger wrote in a letter to the sales force that one of her father's dreams "was to make it possible for all of our extended family to own a piece of this company we love," The (Newark) Advocate reported "I have found a creative way for Longaberger to be part of a public company while preserving 100 percent of our identity."
Terms of the deal were not disclosed but will be negotiated in the coming weeks, said Russell Mack, a spokesman for CVSL and Longaberger. The deal would require lender, shareholder and regulatory approvals.
CVSL will be a "docking station" for Longaberger and other direct-selling companies, and more shipping or manufacturing operations from other CVSL companies could be added to the Longaberger facilities, he said.
Mack, who said that Longaberger has a great location, said there is "a great possibility that over time, jobs can be created in the area for CVSL using currently underused Longaberger facilities."
The companies could not immediately be reached for comment Sunday. A security guard said Longaberger offices were closed. A message was left for a telephone listing for CVSL.
The Longaberger headquarters office is in Licking County, and County Commissioner Tim Bubb said he hopes any change in majority ownership will help the company survive and thrive.
Tami Longaberger will remain president and CEO of the basket maker, and the company will continue operating as a stand-alone business, Mack said.
The publicly traded CVSL was acquired in September by John Rochon, a former chairman of Mary Kay and shareholder of Avon. Longaberger is a "true gem" with its five generations of family heritage and will become CVSL's first direct seller, Rochon said in a release.
The company recently has been taking steps to put its 700 acres of land and facilities to better use. In December, Longaberger said it had added 175 full and part-time jobs in the previous three months, mostly in basket making, shipping and the company's call center.
The company also reported five consecutive months of increasing sales, year over year, the Newark newspaper reported.