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Last Updated: Mar 31, 2009 - 2:29:20 PM |
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River Bend Industries headquarters in Ft. Smith, Arkansas. Mike Morelock photo for The East Iowa Herald.
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VICTOR – River Bend Industries of Ft. Smith, Arkansas, signed a purchase agreement on Monday to acquire Victor Plastics, Inc. The agreement includes a $17.4 million cash offer, minus a working capital adjustment that is to be determined prior to the closing of the transaction.
“This is good news for Victor Plastics, its employees, creditors and communities”, said Jack Cochran, Victor Plastics interim chief executive officer. “Recently, we have consolidated from three plants to two. We closed the facility in Flora, Miss. and moved the work to North Liberty, so we’ve actually added employees in Iowa.”
Victor Plastics, with plants in Victor and North Liberty, filed for Chapter 11 bankruptcy protection in Minneapolis on Jan. 15. On Feb. 21, the company signed a Letter of Intent to sell to River Bend Industries.
“We haven’t heard any details yet,” said one Victor Plastics employee who requested anonymity. “We keep hearing things but some of it never pans out. But overall, everyone seems to be pleased. River Bend appears to be a good company. Right now I would describe it as cautious optimism in the plant.”
That sentiment was echoed by those involved elsewhere in the community.
“The people of Victor are delighted that jobs will remain in the community,” said Dr. Leonard Seda, head of the Victor Community Development Association. “During the last six weeks, we have worked with Ron Embree, River Bend’s President and CEO, and we are confident that River Bend will retain the customer base, which is critical to the success of Victor Plastics.”
Seda and the VCDA have been involved in finding a purchaser since the bankruptcy was announced.
Morris Anderson & Associates of Chicago, a large corporate consulting firm, was hired to assist in the sale.
“The acquisition of Victor Plastics by River Bend Industries is a great fit for both firms,” said David Mack, managing director of Morris Anderson & Associates. “River Bend CEO Ron Embree is extremely experienced in the plastics industry, and will be able to take the business to the next level.” Mack also noted that River Bend is well capitalized and profitable.
Mack explained that the sale to River Bend would take place by April 21. He expects to receive court approval for a sale of the business and a bankruptcy auction under section 363 of the bankruptcy code on March 27. The qualified bid deadline is April 7, with the auction scheduled in Minneapolis on April 9. On April 10, it is expected that the bankruptcy court will give final approval of the sale.
Mack also told the Associated Press that River Bend plans to retain all Victor employees and will help turn around the struggling company.
The is not the first time River Bend CEO Ron Embree has moved to resuscitate a troubled organization.
“Yes, I've been down this road a couple of times, actually,” he said when interviewed after signing the letter of intent.
In October 2006, Moll Industries of Dallas, Tex., announced it would close three plastics injection plants in Ft. Smith, LaVergne, Tenn., and New Braunfels, Tex. Employees of the plants – some with more than 20 years on the job - were told they would be out of work by the first of the year. The next month Embree, a former plant manager, formed River Bend Industries to acquire the Ft. Smith plant.
River Bend is a supplier to Global 5000 companies, including Whirlpool, Exide Industries and Husqvarna Group of Sweden. Victor Plastics, the largest custom molder of thermoplastics and engineering resins in Iowa, employs approximately 380 employees. The Victor Plastics website is www.victorplastics.com and the River Bend Industries website is www.riverbindustries.com
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