Micolas Mill may be spared
"What is running will keep running." That's the word from Grisanti, Galef and Goldress, the financial advising group currently working on negotiations between Johnston Industries and the Meriturn Partners. Meriturn, headquartered in San Franciso and Raleigh-Durham, N.C. has recently signed a letter of intent to buy a substantial portion of Johnston's assets, including plants in Opp, Phenix City and Shawmut. The Opp purchase will include Micolas Mills, but not Opp Mills.
"The Opp plant that has already closed will remain closed, but there is some interest from a property developer in buying that land," said Katie Goodman, a representative of Grisanti, Galef and Goldress. "It is my understanding that what is running will keep running and what is closed will remain closed."
Tommy Cooper, the vice president of manufacturing for Johnston agrees.
"It is my understanding that the plans are to keep running it as it is," he said. Cooper also said that the fiber products branch of Johnston was not included in this deal, but that it is up for bid.
Both Cooper and Johnston CEO Gene Cone will retain their positions in the company after the sale closes, which should be, Goodman estimates, in about two months.
"What's wonderful is that the management team will stay in place," she said. Goodman said, she believed the purchasing group, a financial buyer established in January of this year, intends to expand.
"It wouldn't make sense to not grow," she said. "Their entire aim is to buy businesses such as this. They are looking at running the business into the future as a going concern and at growing a business."
She said that Meriturn was not the sort of organization that purchased troubled companies then shut them down and broke them apart to sold them piecemeal.
"They work with companies, basically middle market companies who need restructuring or turnaround," said Goodman. "They specifically target turnaround opportunities. Everyone here is actually very excited."
According to Goodman, Meriturn consists of five core families and operates with funds and an endowment of about $21 million, with an additional $8 billion behind that. Meriturn was not, she said, a "fly by night" organization.
She said the goal of the company would be to turn around the current financial standing and get operations back in the black, both productive and profitable.
"They will look to grow with the business, stay with the business, and at some point, probably exit the business."
So far, the industries Meriturn has worked with include agriculture/food; chemicals, consumer products/retail, energy/oil and gas, financial services, forest products, healthcare/life sciences, hospitality, manufacturing, metals and mining, processing, publishing, real estate, services, transportation/distribution, telecommunications.
There are still approximately 150 people working at Micolas Mills. After Opp Mills closed and Micaolas cut back production, approximately 380 jobs were lost, 170
with Opp and 210 with Micolas.
"During this period of transition, we have continued to meet all customer requirement," said Cone. "We have appreciated the support of our customers, vendors and employees since the filing."
Johnston Industries announced on Jan. 31, 2003 that it had filed voluntary Chapter 11 reorganization. Meriturn's letter of intent to purchase is being done in compliance with the code and with the guidance of Grisanti, Galef and Goldress.
"This offer would provide Johnston the ability to emerge from this process with
strong balance sheet and the financial resources to remain a leader in the technical textiles and decorative fabrics business," said Cone. "In the coming weeks, Meriturn and other potential buyers will complete their due diligence to acquire Johnston."