Financially troubled Renaissance Plastics Co. is selling its assets to custom injection molders Alliance Precision Plastics Corp. and Viking Industries LLC.
According to documents filed at U.S. Bankruptcy Court in Akron, Ohio, the companies agreed to split three Renaissance subsidiaries. Final bankruptcy details and creditor arrangements still must be worked out, according to filings.
Alliance, based in Rochester, N.Y., will purchase the company's Rochester-based Amplaco Inc. and Nylomold Corp. divisions. Renaissance had planned to merge those operations when it entered Chapter 11 bankruptcy protection in March.
Viking, a minority-owned manufacturing company in Solon, Ohio, agreed to buy Renaissance's Ultra Tool & Plastics Inc. unit in Amherst, N.Y.
Alliance President Bradley Scott was traveling and unavailable for comment late last week, and several Viking officials did not return telephone messages. Voice messages at both the former Amplaco and Ultra Tool facilities greeted callers with the new company names, while Nylomold's telephone number was not working.
Hudson, Ohio-based Renaissance underwent a financial reorganization after receiving $2 million in debtor-in-possession financing in March. The company had expected to record about $60 million in sales in 2002. About 130 people worked at Amplaco and Nylomold, according to documents. Ultra Tool employment figures were unavailable.
Renaissance was created in 1998 when an investment group led by Cleveland-based Key Equity Capital bought Nylomold and Ultra Tool. Amplaco was purchased a year later. At its peak, the company operated 150 injection presses.
Offshore competition and cash-flow problems led to the bankruptcy filing in 2002. Key Equity, now known as Blue Point Capital Partners LLC, had shopped the company to several outside investors before German bank group PB Capital Corp. stepped in, according to a source familiar with the firm.
A turnaround firm was hired, and the company was auctioned to bidders last summer, the source said. Renaissance officials could not be contacted due to a nonworking telephone number.
Alliance has a turnaround history of its own. It emerged in 1998 from Chapter 11 protection after an arm of equity firm ING Groep NV of Amsterdam bought it. The firm recorded injection molding sales of $14 million in 2001, according to a Plastics News ranking.
The Amplaco unit is the second facility for the company and is near Alliance headquarters in Rochester.
Viking is recognized as a minority business enterprise by the National Minority Supplier Development Council and was named minority business enterprise of the year in 2002 by the Northern Ohio Minority Development Council in Cleveland.
Including Ultra Tool, the company has six locations. The company does injection and blow molding, extrusion, metal stamping and rubber molding, according to its Web site. The Ultra Tool operations, including two plants, will be part of Viking's Par Industries LLC unit, according to the Web site.
Ultra Tool ran 54 presses and operated two tool shops when Renaissance bought it in 1998. Viking had been shopping for acquisition candidates that could contribute $25 million to $150 million in sales, according to its Web site. Ultra Tool recorded $34 million in annual sales at the time of the Renaissance purchase.
Buying a turnaround company can be a risky undertaking for a molder unless it fits a specific niche or is an industry leader, said Thomas Blaige, managing director of Chicago-based equity firm Lincoln Partners LLC.
Renaissance was not considered among the elite companies, such as Courtesy Corp. of Buffalo Grove, Ill., that ran into financial difficulties, Blaige said. That could pose some challenges, he added.
``Buying assets of a troubled company, and expecting something good to happen, can be a risky strategy,'' Blaige said. ``As long as an acquisition adds to core products, it might work. The people who are fishing only for a low price are the ones who get in trouble.''