Atlantis Plastics Inc. has retained investment banking firm Houlihan, Lokey, Howard & Zukin of Los Angeles to assist in evaluating alternatives, including a possible sale.
The $400 million film extruder, profile extruder and custom injection molder hired Houlihan Lokey on Jan. 18. Atlantis was told Jan. 16 that its stock was in danger of being delisted from Nasdaq, Atlantis said in a Jan. 23 news release.
Tim Burns, a research analyst with Cranial Capital Inc. in Solon, Ohio, said an Atlantis sale probably would involve separating the firm's more profitable films operations from its molding units: ``I would be surprised if a financial sponsor is going to step up and buy the entire business.''
Atlantis officials in 1999 considered selling the company. They hired investment banker Bowles Hollowell Conner, but were unable to find a buyer.
Standard & Poor's placed Atlantis on CreditWatch with negative implications in August, and reaffirmed the rating last week. The company is in default on certain financial covenants under its secured credit facility.
Continued negative ratings reflect uncertainties associated with Atlantis' decision to retain a financial adviser, S&P credit analyst Anna Alemani said in a Jan. 24 telephone interview.
``The only upside potential that we see is if they get new covenants under the credit facility,'' she said.
Officials of the Atlanta-based company did not return calls seeking comment.
Atlantis makes polyethylene stretch and custom films and molds products for the appliance, automotive, agricultural, building supply and recreational vehicle industries. The company ranked 29th in Plastics News' 2007 survey of North American film and sheet manufacturers.
Atlantis has plants and offices in Fort Smith, Ark.; Fontana, Calif.; Cartersville, Ga.; Elkhart, Ind.; Henderson and Nicholasville, Ky.; Sterling Heights, Mich.; Mankato, Minn.; Tulsa, Okla.; Jackson and La Vergne, Tenn.; and Alamo, Texas.
In the first nine months of 2007, the company reported a loss of $16.6 million on sales of $308.4 million, compared with a loss of $1 million on sales of $328.6 million for the same period in 2006. Its 2006 sales were $418.7 million, with a loss of $4.1 million.