MINNEAPOLIS - The Valspar Corp. announced plans to close several industrial-coatings plants, lay off 5% of its work force and take a $39 million pretax charge as part of a restructuring program aimed at improving its financial results. The company said it will take the charge against earnings in its fiscal fourth quarter ending Oct. 26.

The action is being taken to "eliminate redundant facilities" resulting from Valspar's 2000 acquisition of Lilly Industries Inc. and "to accelerate performance improvement," the company said. The job cuts will affect 350 employees.

The company provided few details regarding the specific sites to be affected by the program, except to indicate that one of the facilities to be closed is located in Monterrey, Mexico, where Lilly had recently opened a new production plant. A Valspar plant in operation there prior to the Lilly merger will be closed.

The restructuring, which includes shutting down seven plants and partially closing four other sites, is expected to result in cost savings of $20 million to $30 million over the next two years. The net cash impact of the charges over the next two years will be "negligible," the company said.

Valspar Vice President and Treasurer Deborah D. Weiss said that since the Lilly acquisition was completed late last year, Valspar has closed six former Lilly plants and one Valspar site. Of the sites scheduled to be closed, six are Valspar plants and one is a former Lilly site, she said. The plants are located in North America and overseas, she said.

In a statement, Valspar Chairman and CEO Richard Rompala said the moves are expected to "strengthen Valspar's financial performance in a difficult economy and position us for significant growth as our industrial markets improve."

Valspar had announced plans to close eight to 10 plants when the Lilly acquisition was completed, but Weiss said the company had found that it could take additional cost-savings actions as a result of the integration of former Lilly operations.