One month after filing for bankruptcy, injection molder Victor Plastics Inc. has agreed to be acquired by River Bend Industries LLC, an injection molder based in Fort Smith, Ark.
Officials with North Liberty, Iowa-based Victor have signed a letter of intent with River Bend. Victor has asked U.S. Bankruptcy Court in Minneapolis for permission to hold an auction of the firm that would be open to all parties. The court then would need to approve the winner of the auction. No purchase price was disclosed in the pending deal.
Morris Anderson & Associates' managing director, David Mack, said he expects the auction to be resolved by the end of March. Morris Anderson is a Chicago-based firm handling the sale for Victor's owner, Spell Capital LLC of Minneapolis.
``This is great news for Victor Plastics, its employees, creditors and communities,'' Victor Chief Executive Officer Tim Czmiel said in a Feb. 15 news release.
``We're excited about the opportunity,'' River Bend owner Ron Embree said in a telephone interview. ``For me, it's business, but it's also personal. It's important to me personally to keep jobs in this country and to keep people working.''
River Bend was formed in 2006 when Embree, former president of Moll Industries Inc., and business partner Chuck Butler bought a former Moll plant in Fort Smith.
River Bend employs about 130 and makes parts for refrigerators, trash compactors and ice makers for Whirlpool Corp. Its other clients include battery maker Exide Technologies Inc. and power-tool maker Husqvarna AB.
Victor employs 420 at plants in North Liberty and Victor, Iowa, and in Flora, Miss. The firm struggled with the downturn in the North American appliance sector; its sales dropped from almost $100 million in 2006 to about $70 million in 2007, as it closed a plant in Kalona, Iowa. In a Jan. 15 court filing, Victor listed debts of between $10 million and $50 million.
Embree added that the custom molding work done at Victor ``is an opportunity for [River Bend] to grow and expand. [Victor] has operators who know how to operate better than a financial company would.''
Victor was one of many firms that Embree had competed against during his 16-year career at Moll. He said that River Bend and Victor ``are similar in a lot of ways'' and share some customers.
Since Victor filed for bankruptcy Jan. 15, the firm has continued to operate and has retained almost its entire customer base, according to Mack. Victor also was able to rehire some technical employees who were let go shortly before the bankruptcy, Mack added.
``We've been servicing our customers and communicating with our customers and our employees,'' he said. ``We're trying to retain both.''