Toner Plastics, a maker of plastic craft supplies, has outbid a private investment firm for the assets of bankrupt compounder Gitto Global Corp.
The purchase in U.S. Bankruptcy Court in Worcester, Mass., was made by S&E Acquisition LLC, which is owned by Toner President Steven Graham. S&E bid $8.95 million for Lunenburg, Mass.-based Gitto, trumping the $8.55 million offer of GGC Acquisition LLC.
Agawam, Mass.-based Toner makes crafts, toys and gifts, including Craft Lace, Fun Wire and Create-A-Purse. Toner extrudes flat, round and wide lace made of flexible PVC. The firm's products can be found at such national stores as Wal-Mart Stores Inc., Michaels Arts & Crafts, Frank's Nursery & Crafts, JoAnn Fabric & Craft, and T.J. Maxx.
Toner also makes other extruded products, such as plastic string used to connect disposable earplugs, tubing for fish tanks and tricycle streamers.
``Gitto Global was purchased because it's a tremendous opportunity,'' Graham said by phone Dec. 9. ``They have a very strong group of employees and a great customer base.''
PMC Group, a compounder, molder and film extruder based in Mount Laurel, N.J., made a preliminary bid on Gitto, but did not attend the final auction, according to interim manager Thomas Doherty. PMC Chairman Paritosh Chakrabarti said he had inspected the Gitto Global site and told Doherty PMC was willing to make a bid of $9.5 million. But Chakrabarti said Doherty did not return his phone calls to discuss the offer. Chakrabarti was unable to attend the auction because he was visiting his firm's operations in France, he said.
``I'm disappointed with the way this was handled,'' Chakrabarti added.
Doherty has served as Gitto's interim manager since the firm filed for Chapter 11 bankruptcy protection Sept. 24. Gitto Global had stopped production and laid off its 75 employees Sept. 17, but reopened in late September after obtaining emergency financing.
``Outside of the turmoil, Gitto Global has a very good product line,'' added Graham, who worked as a chemical engineer for Monsanto Co. before he and his wife bought a struggling business and renamed it Toner in 1989. ``Our goal is to re-establish credibility and get things back on track.''
Gitto Global now employs 54, and its annual sales are estimated at between $30 million and $40 million. Graham declined to provide sales totals for Toner, but said Gitto Global is a larger company both in sales and number of employees.
With 100 million pounds of annual capacity on six extrusion lines, Gitto Global will be able to meet Toner's annual material needs, Graham said. He plans to rename Gitto Global and operate it independently from Toner.
Gitto Global makes proprietary compounds based on resins including PVC, polyethylene, polypropylene and thermoplastic olefins. The firm sells into a number of markets, with wire and cable and medical being the most prominent.