Highview Capital and Victory Park paid $65 million for the disposable cleaning product maker’s three facilities
Wall Street Journal Pro; Bankruptcy
By Katy Stech
24 July 2017
wo investment firms have taken over ownership of Katy Industries Inc.’s three Midwest manufacturing plants, which produce storage bins and disposable cleaning products, in a $65 million deal.
The struggling St. Louis manufacturer’s operations were bought out of bankruptcy on Monday by Los Angeles-based private-equity firm Highview Capital LLC and Chicago-based investment firm Victory Park Management LLC, according to a press release. The new parent company will go by the name American Plastics LLC.
Katy Industries officials looked for buyers after putting the company into chapter 11 protection on May 14. The company, which has 300 employees, sells products under the Continental, Huskee, Color Guard, Contico and Tuffbin brands.
Founded in 1967, Katy’s operations took in nearly $108 million in revenue last year, according to earlier documents filed in U.S. Bankruptcy Court in Wilmington, Del.
Katy Industries officials blamed the company’s financial problems on unexpected costs that arose when the company moved its main Missouri plant and its 22 molding presses from Bridgeton to Jefferson City last year. The 530,000-square-foot plant makes mops, brooms and brushes for janitors, industrial companies and food-service distributors.
After the move, some machines needed repairs, and training new workers took longer than expected, according to court documents.
Katy Industries officials also said that profits were slow to accrue from its 2015 purchase of an Ohio plant, which makes home-storage products including plastic totes, cabinets and shelves. Those products are sold at hardware stores and major home-improvement retailers, according to court papers.
The company operates a third plant in Fort Wayne, Ind., that makes molded plastic components for special customer orders.
Amid the financial trouble, the company ran short on money to pay debts of roughly $100 million.