DT Industries Inc. announced Jan. 20 that it has sold its DT Converting Technologies machinery division to a three-person executive management team of the Hyannis, Mass., company, backed by investment firm Management Capital LLC of Providence, R.I.
The new firm is being called Sencorp Inc.
DT had announced Jan. 5 that it would sell the unit after DT defaulted on $2.7 million of its senior debt that was due Dec. 31.
The sale marks the return of Sencorp as an independent thermoforming machinery company. In 1993, DT, then known as Detroit Tool & Engineering Co., bought Sencorp Systems Inc. DT, a Dayton, Ohio-based conglomerate, is traded on Nasdaq.
DT said the buyers paid about $6 million in cash, which DT will use to pay back the $2.7 million, as well as to reduce overall debt.
According to a news release, Sencorp will continue making Sencorp- and Armac-brand thermoforming machines, the Stokes brand of pill-making machinery, Cerapak blister packaging equipment and Ceratek laboratory formers and sealing machinery. The Stokes machines, called rotary compacting presses, will be sold through an exclusive marketing agreement with Compression Components & Service LLC of Southampton, Pa.
Brian Urban, who was president of DT Converting Technologies, is now president and chief executive officer of Sencorp. Other members of the management team involved in the ownership are Jim Tedesco, vice president of sales and marketing, and Greg Meikle, chief financial officer.
The senior management team will continue to oversee engineering, manufacturing, service and sales of the Hyannis company, which employs 115. Urban said the Sencorp businesses generate about $25 million in annual sales. He declined to comment on the selling price.
DT's financial struggles began in 2000, with an accounting scandal that caused Nasdaq to suspend trading of its stock, as an investigation found the company had overstated some asset accounts. That same year, Sencorp put its extruded foam downstream equipment business up for sale.
New management tried to engineer a rebound, but the U.S. capital spending slowdown began to hit DT. The company lost $65.6 million in fiscal 2003, which ended June 29. In fiscal 2002, the company lost $17.1 million. Sales declined 26 percent to $241 million in fiscal 2003, from $326.3 million in 2002.
DT said it is negotiating with senior lenders on an agreement covering its payment default.