Portland, ME., - American Capital Strategies completed its 26th employee buyout by teaming up with the company's management and employees and an investment group to complete the purchase of the Biddeford Textile Division from Sunbeam Corporation. The new company has simultaneously entered into a 5-year agreement to supply Sunbeam's Electric Blanket Division. The sale was completed on May 9th in Portland, Maine. The new company will be called Biddeford Textile Corporation.
American Capital Strategies (Nasdaq:ACAS) is a leading investment bank specializing in management and employee buyouts. ACS will own 29% of Biddeford Textile, an investment partnership will own 29% and management and the employees will own 42% directly and through an employee stock ownership plan ("ESOP").
Sunbeam announced in November of last year that it intended to sell the Biddeford, Maine operations and find alternate sources of blankets for its electric blanket division. The blankets are currently produced in two facilities in Biddeford, Maine. The blankets are shipped to Sunbeam's Mississippi operation where they are wired, packaged and distributed to customers. Sunbeam currently provides 100% of the electric blankets sold in North America.
A definitive purchase agreement was signed March 27th. ACS raised the $15 million financing necessary to complete the transaction. The purchase price was $13.5 million, including the value of a lease for one of two facilities used in the company's operations.
Malon Wilkus, President and founder of American Capital Strategies, stated "We are always ready to team up with employees to help save their jobs when it makes good business sense. We are excited that there will be broad-based employee ownership. We believe Biddeford Textile Corporation has a great future ahead of it; we expect significant expansion into conventional blankets and other markets. While Al Dunlap cuts, we mend".
The sale will ensure that more than 370 employees located in Biddeford will retain their jobs, which were threatened had the deal not closed. As part of the transaction, members of the Union of Needletrades, Industrial & Textile Employees ("UNITE"), voted on a new collective bargaining agreement, contingent on the new company being partially employee-owned through an ESOP.
"UNITE's aggressive efforts to save the company from being shut down or moved played a critical role. Our support of employee ownership made the critical difference," according to Mr. Michael Cavanaugh, northern New England director of UNITE.
American Capital Strategies, itself employee owned, has its main office outside of Washington, DC with regional offices located in or near New York City, Boston, Pittsburgh, San Francisco and Savannah, GA.
Click here for more information about Biddeford Textile Corporation.
Click here to learn more about this portfolio company.
