Blow molder Consolidated Container Co. LLC of Atlanta is acquiring all the assets of MAB Group LLC, a blow molder of beverage bottles in Louisville, Ky.
Consolidated Container is buying the assets out of bankruptcy. MAB Group had filed for Chapter 11 bankruptcy protection in August, citing lack of operating capital. The purchase must be approved by the U.S. Bankruptcy Court in Louisville. A hearing is scheduled for Nov. 2.
Michael Banks and Oklahoma City businessman Terry Swart founded MAB in 2005, and the company started operating five months ago. Banks had managed Consolidated's plant in Hutchinson, Kan.
Banks said the market potential for serving dairy, water and juice customers in Louisville was strong.
``Louisville was wide open,'' Banks said in an Oct. 18 telephone interview. ``My goal starting out in this was to build a state-of-the-art facility and to build jobs for the community. At the end of the day, I think that will happen.''
R. Keith Brower, senior vice president of operations for Consolidated, said the Louisville plant gives his firm a geographic hold it did not have with its other plants.
``We have every expectation that this [deal] will be approved,'' Brower said. ``We're looking forward to operating a plant in Louisville. It's an interesting time.''
The plant will supply bottles for Dean Foods Co. and other Consolidated customers, Brower said. The 43,000-square-foot leased site will be Consolidated's 60th plant and will employ roughly 25. It already has three lines, and officials are looking to add more.
``We're currently evaluating how many lines will go in,'' Brower said.
According to bankruptcy court documents, the three existing lines make small bottles, half-gallon and gallon bottles on Uniloy Milacron equipment.
A new agreement between Consolidated and Dean Foods cinched the decision to sell MAB, Banks said. In August, Consolidated and Dean settled a dispute over a previous deal - Consolidated agreed to pay Dean $10 million over the next two years - and they entered a new pact that keeps Consolidated as Dean's primary bottle supplier through 2011.
Dean Foods, which owns 25 percent of Consolidated, is the largest processor and distributor of milk and dairy products in the United States.
Consolidated has been active with acquisitions this year, adding plants in Spokane, Wash., and Salt Lake City by purchasing assets from Quintex Corp. in Nampa, Idaho.
In June, Consolidated defaulted under the terms of its senior credit facility. Since then, the company has secured waivers from its creditors to permit it to borrow money to finance acquisition growth, Chief Financial Officer Richard Sehring said in an Oct. 11 conference call.
Brower said Consolidated received approval on those bank waivers in mid-October. Chief Executive Officer and President Jeffrey Greene said Consolidated's acquisitions pipeline remains active and strong.
``We continue to pursue acquisition targets,'' he said.
