BOARDMAN Indiana company will take over American Paper
The company's current owner will lose nearly $39 million on the sale.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
BOARDMAN -- An Indiana publishing and envelope company will take over American Paper's two Boardman plants after no other company submitted a bid.
A bidding deadline set through bankruptcy court ended Thursday with Our Sunday Visitor of Huntington, Ind., as the only bidder.
Kyle Hamilton, general manager of its envelope printing division, said last month that the company intends to retain the Boardman plants and employees.
Tom Pietrocini, American Paper chairman and chief executive, said Our Sunday Visitor's executives reiterated that intention in meetings Thursday.
American Paper, which employs 330 and is the country's largest printer of church offertory envelopes, is owned by a New York investment company. American Paper filed for bankruptcy protection last year because potential buyers didn't want its high debt and leases for closed plants in Virginia and Arizona.
Owner takes big loss
Its owner, Bruckmann, Rosser, Sherrill & amp; Co., is taking a large loss on the sale, which is expected to be approved Tuesday by Judge William Bodoh in U.S. Bankruptcy Court in Youngstown. The financial transaction should become final Wednesday, Pietrocini said.
The investment company paid $56 million for the business in 1998, but Our Sunday Visitor's bid is $17.4 million.
Pietrocini said the value of the business declined because annual sales fell from $44 million to $35 million and earnings fell when investment was made in new equipment and production processes.
Pietrocini, who is not remaining with the company, said the company lost customers served by its former plant in Richmond, Va., and eliminated about $5 million in low-profit sales in its commercial envelope division.
If other bids had been made for the company, there would have been an auction Monday, which could have forced up the sale price.
Pietrocini said he wasn't disappointed that there will be no auction because he thinks the lack of bidders only means that Our Sunday Visitor made a fair bid. Other companies were talking to American Paper officials as late as Wednesday, meaning the sale was getting a thorough evaluation, he said.
Our Sunday Visitor has 110 employees in its envelope division in Indiana and 65 in its printing division, which publishes a Catholic newspaper and other items.
The first order of business for the new owner will be to get back some business that has been lost since the bankruptcy filing, he said.
Pietrocini credited American Paper's employees for keeping up company operations so that it was able to emerge from bankruptcy court with a strong parent company. Other local companies, such as CSC Ltd. and Phar-Mor, were liquidated after failing to find a way out of bankruptcy court.
"We can be very proud," Pietrocini said.