Injection molder Precise Technology Inc. is finishing a deal to sell and lease back its complex of buildings in Buffalo Grove, Ill., a move designed to improve its cash flow.
The North Versailles-based firm recently consolidated its three-building operation in Buffalo Grove. Precise now uses two of the buildings and plans to use about 30 percent of the third, a 267,000-square-foot building where it will keep its mold-making operations. Precise acquired the buildings, totaling almost 1 million square feet, in 2002.
Precise has sold two of the buildings, and is selling the third. Precise signed a long-term lease on the two properties, and will do so on the third, allowing it to keep operating there but freeing up cash, said John Weeks, chairman and chief executive officer.
Equity owner Code Hennessy & Simmons LLC in Chicago refinanced Precise in February, restructuring about $160 million in debt and giving CHS and its partners a $41.5 million dividend, according to Moody's Investors Service. CHS and its partners have invested $98.7 million in Precise.
Moody's noted at the time that Precise was highly leveraged and had a weak balance sheet and modest cash flow. However, the ratings service said the firm benefited from strong customer relations and limited exposure to resin price increases because of monthly pass-through agreements with 60 percent of its customers.
Weeks said business has ``gone a little slower this year'' but is showing signs of a significant uptick. Precise reported $260 million in injection molding-related sales in 2003, down slightly from 2002. Moody's said the company had $283 million in total sales and $44 million in earnings before interest, taxes, depreciation and amortization in 2003.