Bankrupt resin supplier Thornton & Co. Inc. expects to be acquired by Axxom LLC, a business owned by compounder/recycler Chemical Resources Inc.
Axxom plans to submit a $3.7 million bid for Southington, Conn.-based Thornton at an auction on Nov. 23. Of that amount, $2.7 million will come from Princeton, N.J.-based CRI, with the remainder coming from Thornton management.
If no higher bids are received, Axxom will acquire Thornton's inventory and intellectual property assets, but not the firm's accounts receivable or other litigation assets, officials said in a Nov. 3 news release.
If Axxom wins the bid, Thornton is expected to resume normal-course resin brokerage operations under the Axxom name.
“We see the ability to take the business and increase its value over the long-term,” CRI owner Paul Keimig said in a Nov. 5 phone interview.
CRI made its offer to buy Thornton after being approached by Tiger Group LLC of Boston, who was proposing to run the liquidation process. After seeing synergies between the two businesses, Keimig said it “was attractive to [CRI] to go forward with this management team — which has extensive customer and supplier relationships — and to develop a higher value return for this business.”
CRI employs almost 40 at an office in Princeton, N.J.; a recycling plant in Jacksonville, Fla.; and compounding plants in Chesapeake, Va., and Guangdong, China. The 21-year-old firm has annual sales of $60 million.
The Chesapeake site originally was run by Nova Chemicals Corp. and now is owned by the Hampton Roads Integrated Bioenergy Complex. Another CRI unit — Chemres LLC — operates its medical and specialty compounding from Chesapeake. The site has 100 million pounds of compounding capacity and soon will have 30 million more of twin-screw capability in the second quarter of 2016 as part of a $6.5 million investment from CRI.
Thornton filed for Chapter 11 bankruptcy on Aug. 10, citing a major drop in petrochemical prices in late 2014 and early 2015 as a reason. Those drops caused the firm's sales to decline by 20 percent. Thornton officials have said the firm had annual sales of about $200 million and annual sales volume of more than 300 million pounds, mostly in prime and off-grade polyethylene and polypropylene.
The filing was made after Thornton's main bank – People's United of Bridgeport, Conn. – rejected a proposed repayment plan. Vice President Jake Thornton said in early September that the firm had reached an agreement with the bank that would allow Thornton to continue to operate and sell down inventory.
“We are gratified with the market interest in investing in [Thornton], and [are] very pleased that Axxom has faith in our ability to once again run a thriving business that allows us to service our valued suppliers and customers,” CEO and founder Paul Thornton said in the release.