Auburn, Ala.-based medical startup SiO2 Materials Science has emerged from Chapter 11 bankruptcy with Oaktree Capital Management LP successfully acquiring the company.
Amid the COVID-19 pandemic, the company rapidly expanded with a $163 million investment in 2020 to meet increased demand for testing supplies, Ken Kelly, chief operations officer at SiO2, told Plastics News in an interview.
"As those volumes tapered away … we had to go back to our core [materials science] business with the primary drug containers," including vials, syringes, blood tubes and transport tubes for the diagnostic market, Kelly said. "We had overextended ourselves."
The injection molder filed for Chapter 11 protection on March 29 and emerged on Aug. 1, he said.
"The original stakeholders were not able to come to terms and as a result our senior debt holder was Oaktree … [which] funded our Chapter 11 process," Kelly added.
"We've done some rightsizing," he said, with a layoff of 104 employees at the end of July and the sale of its second facility to the city of Auburn.
Through Oaktree's investment, SiO2 was able to "preserve 112 jobs and bring science [to the market] that [it has] been excited about," Kelly said.
"It's unfortunate. … No one ever wants to go into bankruptcy," Kelly said.
Since Oaktree funded SiO2's bankruptcy, the company has "owners that have been very supportive," he said. "We've been able to mend [our relationships] with all our critical vendors [and] critical automation suppliers … and able to bring our cost structure more in line with how we want to emerge."