A new company, Thermoforming Systems LLC, has bought the assets of financially ailing equipment maker International Thermoforming Systems from two banks that seized the Yakima, Wash.-based company after it defaulted on loans.
``We bought the assets from the secured lenders,'' said Thomas Feichter, TSL president. ``Thermoforming Systems is buying assets only, not assuming any liabilities.''
TSL will retain the International Thermoforming factory and has hired all 23 current employees. The first day under the new ownership was June 28.
International Thermoforming had sales of $18 million in the fiscal year ended June 30, 2001. The company makes high-volume thermoforming machines for food packaging and other industries.
ITS ran into financial trouble in late 2001 and now plans to liquidate via Chapter 7 of the U.S. Bankruptcy Code, according to a news release announcing the asset sale.
In a July 1 telephone interview, Dave Irwin, founder and majority owner of ITS, said the recession hurt his company.
``The U.S. economy, since late 2000, has been a real tough market, especially in the capital equipment area,'' he said.
Irwin called the pending bankruptcy ``imminent.'' He said it was ``a last resort for ITS,'' taken ``only after we had exhausted our personal resources.''
Employment at the Yakima thermoforming machinery factory peaked at 78 last summer, but it fell to 45 by October.
``By mid-December, we laid off what we felt was a final reduction to reach a minimum level of personnel to operate our company,'' Irwin said.
Walls Fargo Bank and U.S. Bank repossessed ITS after the company defaulted, according to the news release.
Feichter has a background in consulting, mergers and acquisitions and - in the early 1990s - the plastics industry. He was president of PVC Compounders Inc. of Kendallville, Ind. He also worked in the plastic lumber industry. Feichter said he started doing mergers and acquisitions in 1997.
The new owner has retained two principles of International Thermoforming: Irwin is now vice president of sales and James Naughton is vice president of operations.
Feichter said the company has a backlog of seven thermoforming machines worth $4.9 million and orders deliverable over the rest of this year. He said the backlog means customers trust the company to perform.
``It's an excellent start for a company coming out of financial trouble,'' Feichter said.