11/21/2011
HEADLINES
Würth Buys Cardinal Fastener
The Cardinal Fastener booth at the 2011 National Industrial Fastener & Mill Supply Expo featured a neon “Open” sign to make sure customers knew the Cleveland-based manufacturer is operating during the bankruptcy process. CEO John Grabner (right) told GlobalFastenerNews.com that in contrast to many bankruptcies where sales decline, Cardinal’s orders tripled. (Photo: Tracey Lumia, Distributors Link)
W?rth Submitted Lone Bid
Würth Submitted Lone Bid
Würth submitted its $3.9 million stalking horse bid for Cardinal in September, and turned out to be the lone bidder on the business, despite interest from more than 60 companies, according to Crain’s.
Under the bid, unsecured creditors are due to receive less than 20% of the money owed to them.
Calfee Halter & Griswold attorney Jean Robertson, who represents Cardinal’s approximately 200 unsecured creditors told Crain’s she was satisfied with the sale price because she believed the company has been marketed well, with more than 100 potential bidders solicited. ”From the debtor’s standpoint, they didn’t pay enough,” Robertson said. “From (Wurth’s) standpoint they may have paid too much. That’s a perfect result; everyone’s a little unhappy.”
Würth submitted its $3.9 million stalking horse bid for Cardinal in September, and turned out to be the lone bidder on the business, despite interest from more than 60 companies, according to Crain’s.
Under the bid, unsecured creditors are due to receive less than 20% of the money owed to them.
Calfee Halter & Griswold attorney Jean Robertson, who represents Cardinal’s approximately 200 unsecured creditors told Crain’s she was satisfied with the sale price because she believed the company has been marketed well, with more than 100 potential bidders solicited.
“From the debtor’s standpoint, they didn’t pay enough,” Robertson said. “From (Wurth’s) standpoint they may have paid too much. That’s a perfect result; everyone’s a little unhappy.”
Germany’s Würth Group purchased Cardinal Fastener & Specialty Co. for $3.9 million at auction, Crain’s Cleveland Business reports.
Judge Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court in Cleveland approved the sale on Oct. 27. The judge also waived the customary 14-day waiting period to close on the sale of a bankrupt company, paving the way for Wurth to close the deal quickly.
“We hope to close on it by Nov. 1,” said Marc Strandquist, CEO of Wurth’s Michigan-based Dokka Fasteners unit.
Strandquist reportedly will oversee Cardinal going forward as it continues to operate locally under current president John Grabner.
Germany’s Würth Group purchased Cardinal Fastener & Specialty Co. for $3.9 million at auction, Crain’s Cleveland Business reports.
Judge Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court in Cleveland approved the sale on Oct. 27. The judge also waived the customary 14-day waiting period to close on the sale of a bankrupt company, paving the way for Würth to close the deal quickly.
Marc Strandquist, CEO of Würth’s Michigan-based Dokka Fasteners unit, will oversee Cardinal going forward as it continues to operate locally under current president John Grabner.
“Step one will be to resupply Cardinal, a maker of bolts and other fasteners, with working capital so it can buy more inventory,” wrote Crain’s reporter Dan Shingler. “Four people are slated to be added to increase sales and to stabilize relationships with existing customers who need to know that Cardinal is secure financially.”
Strandquist said Wurth will invest further in Cardinal to expand it.
“We plan to bring in about $1 million worth of new equipment” over the next year, stated Strandquist.
By the end of 2012, Würth hopes to return Cardinal to its previous operating capacity, with projected sales of $10 million and a doubling of its headcount to more than 50 workers by the end of next year.
At the fastener show in Las Vegas, Grabner told GlobalFastenerNews.com that his company’s growth continued to be strong — just not enough to pay for needed wind energy investments. Now he says Cardinal will be able to grow faster under Würth’s ownership.
Cardinal had nearly doubled its revenues in four years with wind energy fasteners, supplying more than a dozen wind turbine builders, including the Danish wind manufacturer Vestas and the Spanish Gamesa SA.
But court records indicate Cardinal owes Wells Fargo $1.8 million and the Grow America Fund of the nonprofit National Development Council more than $850,000. Approximately 200 unsecured creditors are owed an additional $3 million.
Grabner says Cardinal will now be able to grow fastener under Würth’s ownership.
“We will no longer have any restrictions on growth,” Grabner told Crain’s. “The money was always the limiting factor.”
Würth reportedly intends to keep Cardinal operating at its existing location and under its existing name.
Cardinal received worldwide publicity for its wind energy fastener manufacturing when President-elect Barack Obama toured the plant enroute to his 2009 inauguration.
Cardinal Fastener is located at 5185 Richmond Rd., Bedford Heights, OH 44146. Tel: 216 831-3800 Web: cardinalfastener.com ©2011 GlobalFastenerNews.com
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