Foam giant Foamex International Inc. has signed an agreement to sell substantially all of its assets to an affiliate of New York-based MatlinPatterson Global Opportunities Partners III LP for $105 million.
Media-based Foamex announced the deal March 25.
Foamex, the biggest polyurethane foam firm in North America, recently filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code for the second time in four years, citing the difficult economic climate and the company's substantial debt burden more than $380 million as contributing factors.
MatlinPatterson, along with Bank of America, are providing Foamex with $95 million in debtor-in-possession funds.
According to a Foamex news release, MatlinPatterson will buy Foamex's assets as a going concern, assuming the company's ongoing obligations to customers and vendors, and offering continued employment to workers.
The sale depends on court approval, and on other offers that might be made at a May auction.
Following approval of the sale, Foamex businesses will emerge from Chapter 11 as a stable and competitive private company with a much stronger balance sheet, Jack Johnson, president and CEO, said in the release. The company will have a capital structure more suited to today's challenging business environment, he added.
Foamex makes PU foam for bedding, furniture, carpet cushioning and automotive applications, as well as making high-performance technical foam for other uses in industrial, aerospace, defense, electronics and computer sectors.