Milwaukee-based Sensient Technologies Corp. has announced a restructuring plan to eliminate underperforming operations, improve efficiencies and consolidate manufacturing facilities.
The announcement comes after Greenwich, Conn.-based hedge fund FrontFour Master Fund Ltd. indicated last month that it plans to nominate four people to Sensient’s board of directors at the next annual meeting of shareholders. The meeting date has not yet been announced.
Since Dec. 31, 2013, FrontFour and its affiliates have acquired control over additional shares and currently appear to control approximately 1.5 percent of Sensient’s outstanding shares of common stock.
Sensient strongly opposes FrontFour’s director candidates, it said in a statement last month.
The company expects the restructuring plan will generate cost savings of between $20 and $25 million per year upon completion, expected in 2015. The plan will also allow more efficient capital allocation toward strategic activities, Sensient said.
Pre-tax charges for the restructuring are estimated at $90 million, with cash charges of less than $25 million.
Additional details of the restructuring plan will be available in the first quarter financial results conference call, the company said.
“The actions announced by Sensient today represent an aggressive plan to improve the company’s cost structure,” said Paul Manning, president and chief executive officer of Sensient. “At the same time, we have found a responsible means to return additional capital to shareholders while preserving the financial flexibility necessary to invest in pursuing the substantial growth opportunities we see in our business. It is clear that shareholders want us to continue to execute our existing strategy and to take advantage of opportunities to grow and improve the business and drive out costs. I am very pleased by the level of support that shareholders have expressed for Sensient’s management and its ongoing strategy.”