PVC compounder Lynn Plastics Co. LLC of Lynn, Mass., has been sold to Republic Financial Corp., a private equity firm in Aurora, Colo., and will be closed later this year.
Bruce Petersen, who bought Lynn Plastics from the Goldstein family in 2002, declined to comment on the situation. Sources close to the company said Lynn had defaulted on a loan from Key Bank of Cleveland sometime last year. In early July, Republic bought Lynn's debt from Key Bank and decided to liquidate the 37-year-old compounding firm, sources said.
Lynn's total debt had reached about $8 million, while its 2004 sales were around $20 million. The 75-employee firm lost more than $1 million in 2004 and the first quarter of 2005, sources said.
Company sources cited high costs for resins and other raw materials as one reason for the company's financial problems. Republic officials referred all calls to Dave Lionetti, an executive with the firm who could not be reached for comment. Management firm Newmarket Partners of Cleveland has been operating Lynn for Republic since the acquisition. Newmarket executive Tom Moore also could not be reached.
Lynn operates three Banbury mixers and two dry-blending lines in a 250,000-square-foot location about 10 miles north of Boston. Most of the firm's sales are of PVC compounds for the automotive industry. Sources said Lynn has a number of exclusive color matches for PVC compounds used in instrument panels by General Motors Corp. and DaimlerChrysler AG. Contracts for some of that work will be sold to another PVC compounder, sources said.
After buying the firm, Petersen - a compounding veteran with more than 25 years of experience at A. Schulman Inc. and Diamond Polymers Inc. - helped Lynn introduce a line of thermoplastic vulcanizate products. He also struck a deal under which German compounder Rowa Group would produce specialty compounds at the Lynn site as Rowa Group USA Inc., a 50-50 joint venture with Lynn.
Lynn was founded in 1968 by brothers Sidney and Saul Goldstein. The firm survived a 1981 fire that destroyed its original manufacturing site. Lynn stayed together via tolling and contract manufacturing until opening its new facility in 1985.