A month-long search for a buyer for financially troubled Hobson Mould Works Inc. has attracted letters of intent from six prospective purchasers.
Milwaukee-based Firstar Bank, Hobson's largest creditor, will evaluate the offers and pare down the list to two or three preferred companies in the next few days, said Ken Mann, principal of Equity Partners Inc. of Easton, Md.
Hobson hired Equity Partners in January to find a buyer within 30 days. Hobson, which makes blow molds and molded parts, has laid off more than 100 of its 140 employees since December and has been renegotiating with Firstar on its loans.
The Shell Rock, Iowa, company is more than $6 million in debt with Firstar and suffering from a downturn in the tooling business. The bank has provided added funding to keep Hobson operating while a buyer is sought, Mann said.
The bids, from unnamed companies, were below what was needed to pay back bank loans.
"We have a lot of interest," Mann said. "Whether we can come to a deal with a company that the bank can live with is the next question."
Bids came from an assortment of companies, Mann said. They included an equipment dealer, another mold maker, a division of an engineering company and a diversified investment house that has other manufacturing properties.
Some of those vying for Hobson want to buy the company whole, while others wanted to purchase either the tooling or molding operations. Another bidder wishes to buy the liquidated assets.
The latter option will not be considered unless other bids fall through, Mann said. After a bank makes its evaluation, those companies will have more than two weeks to perform due diligence and make a final determination.
The lead bidder could change in that time, and new offers can still be made, he said.
"Our first intent is to keep the company going," Mann said. "Or the people who sell to them lose a customer, people who buy from them will have to go elsewhere and a lot of employees will be on the streets."
Several prospective bidders asked that specific Hobson managers be retained, Mann said without elaborating.
Company President and Chief Executive Officer Gerald Hobson was traveling overseas and could not be reached for comment.