A 2-year-old equity firm in Texas has placed an initial, stalking-horse bid to buy polycarbonate eyewear producer Vision-Ease Lens Inc., after its financially troubled parent filed for Chapter 11 protection from creditors.
Vision-Ease, claiming to be the third-largest optical-lens manufacturer in North America, was part of a June 23 bankruptcy filing by parent company BMC Industries Inc. of Ramsey, Minn. The voluntary petition, filed in U.S. Bankruptcy Court in Minneapolis, asks for temporary financing until Vision-Ease can be sold and other BMC businesses wound down or sold.
The publicly traded company, founded in 1907, also makes aperture masks for television picture tubes under its Buckbee-Mears subsidiary. That business has declined seriously, with much industry production moving to lower-cost sites in Asia, the filing said.
BMC no longer could meet its financial covenants, and the optical-lens business could not generate sufficient cash flow on its own, the filing said. BMC already has shut its one remaining aperture-mask production plant, in Cortland, N.Y., the filing stated.
Vision-Ease makes both PC and glass eyewear lenses at a 150,000-square-foot plant in Ramsey and a newer plant in Jakarta, Indonesia. That plant ships about $1.6 million in lenses to Minnesota each month. The firm also distributes plastic lenses from centers in Montreal and Essex, England.
A day before the bankruptcy filing, BMC entered an asset purchase agreement with Insight Equity LP, a private equity and turnaround firm in Southlake, Texas, near Dallas. Insight, founded in August 2002, includes former associates with equity firms Carlyle Group and Bain Capital LLC. Insight's lone portfolio firm is a Dallas-area fuel distributor.
Insight's bid for Vision-Ease is a long way from completion, said Ted Beneski, Insight chief executive officer and managing partner. The company is a stalking-horse bidder, with a bid that sets a target price for Vision-Ease before it goes to auction, Beneski said. That bid price has not been disclosed publicly, nor has an auction date been set, he said.
Even though it is early in the process, Insight hopes to gain control of the company at auction, Beneski said. Vision-Ease and its financial advisers had located several potential buyers after starting the search in early 2004, the filing stated.
``We think it's a good company,'' Beneski said June 24 by telephone. ``It's healthy, and we feel strongly about its strategic direction and future. It was hurt financially by some of the proceedings with other pieces of the [BMC] business.''
BMC's optical-lens group also has suffered from reduced sales and profitability, affected somewhat by BMC's problems. Vision-Ease stopped production in Azusa, Calif., in 2002 and transferred that work to Indonesia.
BMC officials hope the transition to new Vision-Ease ownership will be seamless and the company will emerge financially stronger. ``Despite this filing, our Vision-Ease business will continue operating without interruption,'' BMC Chief Executive Officer Douglas Hepper said in a news release.
Curtis Peterson, BMC senior vice president and chief financial officer, who was handling media inquiries, did not return a telephone call seeking comment.
The firm employs about 400. BMC had $105.2 million in total assets and debt of $164.7 million as of June 23, according to the filing.
Current sales figures were unavailable. BMC recorded $248 million in 2002 sales. For its last full reporting quarter, ended in September, it recorded sales of $39.5 million and a loss of $12.1 million.