BETHESDA, Md., April 29 /PRNewswire/ -- American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has completed the previously announced buyout of Borden Decor, a leading manufacturer of decorative paper and vinyl surfacing materials used in a variety of industrial applications including commercial wallcoverings, from Borden, Inc. Sales in 1997 were approximately $105 million. The new company, to be known as Decorative Surfaces International, Inc., will be majority owned by its employees, while ACAS will hold a minority stake. ACAS invested $16 million in DSI. LaSalle National Bank made a $40 million credit facility available to the new company.
Stephen P. Walko, an ACAS director, has been appointed as the Chief Executive Officer of Decorative Surfaces International, Inc. Mr. Walko, a veteran at running large manufacturing businesses, previously served as President and CEO of Textileather Corporation, a supplier of vinyl products to the automotive industry.
At Textileather, Mr. Walko led the 1989 employee buyout of the company from GenCorp, oversaw dramatic improvements to the productivity and profitability of the company, ultimately led the employee-owners in the realization of increased value through the sale of the company to a strategic buyer. ``I am looking forward to working with the management and employees of Decorative Surfaces International, Inc. to maximize the company's potential. Having experienced the benefits of employee ownership first-hand, and become familiar with the manufacturing process and markets, and particularly the many fine individuals at all levels of the company, I am excited about the possibilities and future of DSI.''
The completion of the transaction followed, among other events, the negotiation and ratification of a new labor agreement with the Union of Needletrades Industries and Textile Employees, which has historically represented hourly employees at the Columbus manufacturing facility, and which will represent hourly employees at DSI's St. Louis manufacturing facility after the closing. The new labor agreements, while extending union representation, are expected to significantly enhance productivity and quality at the company. ACAS Executive Vice President Adam Blumenthal said, ``These historic labor agreements demonstrate a sophisticated involvement with employee ownership and participation by a creative and persistent union leadership. The benefits of the enhanced productivity which will flow from these agreements will be evident to customers and will ultimately be shared by investors and employees alike.''
John Ireland, Principal, American Capital Strategies commented, ``We have an ambitious business plan which includes moving the St. Louis operation to a state-of-the-art facility, substantial capital expenditures at our Columbus facility, several new products, and substantial improvements to quality and productivity. We are pleased to have a CEO with the breadth and depth of Stephen Walko to lead this project. With the new labor agreements, DCI will be one of the lowest cost, highest productivity producers in its industry. We appreciate UNITE bringing this transaction to us and their efforts on behalf of the employees to insure that nearly 700 jobs were retained and that each employee owns a stake in the future of the company.''
``American Capital has invested approximately $16 million and raised the additional funds necessary to complete this $55 million financing,'' commented American Capital's President and CEO Malon Wilkus. ``This transaction is an excellent demonstration of American Capital's expertise and ability to add value. Our long-standing relationships and knowledge of employee buyouts allowed us to invest the time and effort in this complicated transaction which required extensive labor negotiations. Other buyout and financing companies did not make similar investments because they lacked the experience and relationships to properly evaluate it.''
``This makes a total of $70 million that American Capital has invested since our IPO in August of last year.''
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