Owens Corning, which a month ago filed for bankruptcy protection, wants to spend $15 million to buy a South Carolina manufacturer that it says will help increase its sales and make it a much more profitable company.
Anderson, S.C.-based Foundry & Steel Co. provides critical expertise in the manufacture of glass-fiber products to reinforce plastic, Toledo's third largest firm said. OC, in a request to U.S. Bankruptcy Court, said a competitor will buy up the foundry if the local company does not.
Buying the company that has 200 employees in Anderson and 26 in Amarillo, Tex., would allow OC to expand its manufacturing capabilities within its composites operations, said OC spokesman Gregg Bronk. “It's a business with a great deal of potential,'' he said.
The Toledo firm, which has used Foundry & Steel for 50 years, bought $17.8 million in goods from it last year, accounting for 80 per cent of the foundry's total sales. OC proposes to pay $50,000 in cash, $800,000 for noncompete agreements with the foundry's three primary owners, and the rest in a five-year lease arrangement.
The purchase is subject to approval of OC's creditors and bankruptcy Judge Mary Walrath of Wilmington, Del. The request, filed Oct. 26, is subject to a hearing before the judge Nov. 15.
OC has the composites technical expertise, and Foundry & Steel has the manufacturing hardware, Mr. Bronk said. The acquisition is expected to boost a segment of OC's composites revenues from $13 million this year to $25 million next year, with double-digit percentage growth afterward, he said.
``Here's a good merger or an acquisition that's going to help us grow,” Mr. Bronk explained. “The faster we grow profitably, the better off it is for everybody.''
O-C, which has $5 billion in annual revenues, filed for bankruptcy protection on Oct. 5 in Delaware, the state where it is incorporated. It cited as reasons its declining revenues and mounting asbestos injury claims, totaling nearly $9 billion.