Clarion Technologies Inc. is negotiating to sell one of its five plants to a group including its managers and Cascade Engineering Inc.
The automotive and consumer product injection molder launched manufacturing in 1997 with the purchase of Triangle Plastics Inc. in Montpelier, Ohio. It then bought all new equipment and opened a new, 164,000-square-foot building for its own greenfield operations.
The pending deal for the building and its assets in Montpelier would provide cash for Grand Rapids, Mich.-based Clarion to pay down some of its debt.
Executives with Clarion and Cascade, also based in Grand Rapids, would not provide any details because of confidentially agreements linked to the negotiations. But they did confirm that Cascade would join with the Montpelier management team through a buyout group called CK Technologies.
``This will be seamless for the customers, for the suppliers, for the workers,'' said John Brownlow, vice president of sales for Clarion.
A news release from Ohio Gov. Bob Taft's office stated the local government would receive a $500,000 grant to assist CK Technologies with the purchase, and further listed a project price at $13.4 million.
The deal could wrap up by the end of this month.
Clarion can use a cash infusion. It is in the midst of restructuring its holdings and trying to pay down more than $33 million in long-term debt, with a payment due April 30.
It listed $105.6 million in sales last year, compared with $117.3 million in 2000. It also posted a net loss of $35.1 million.
The publicly traded company also stated in its annual filing with the Securities and Exchange Commission that it is ``experiencing significant liquidity restraints,'' and is negotiating with lenders, but noted it expects to work its way through the system successfully. Operating results for the first quarter of 2002 already show improved profitability and officials are ``cautiously optimistic that this trend will continue,'' according to the report.
Clarion was created with the intent of consolidating the fragmented injection molding industry. The new building in Montpelier opened in 1999. The site now employs about 60 people and has nine presses with clamping forces of 1,000-5,000 tons.
The plant supplies automotive and commercial truck customers. If the sale goes through, Clarion will exit the truck industry and focus on automotive and consumer goods markets.
Its four other manufacturing sites - three in Michigan, at Caledonia, South Haven and Greenville, and in Anderson, S.C. - house another 150 presses with clamping forces of up to 1,500 tons.
Cascade is a privately held molder with 1,100 employees producing components for automakers and auto suppliers, office furniture makers and residential garbage bins.
It had about $160 million in annual sales last year and is aiming for future growth, targeting the $1 billion level by 2010.