One of North America’s largest manufacturers of pool components has emerged from bankruptcy.
“We are out of bankruptcy in a month, just as we had hoped,” said Mark Laven, president/CEO of the Latham, N.Y.-based firm. “I’m very pleased. It’s obviously very good news for our customers and employees.”
On Dec. 22, 2009, Latham International petitioned for Chapter 11 protection, saying that it only needed to restructure its debt. It reported nearly $67 million in assets and $239.4 million in debt. For the 2009 fiscal year through November, Latham reported net sales of nearly $90.2 million and losses of $181.4 million.
The company presented the court with a prepackaged bankruptcy plan that stipulated ownership of the firm switch to its senior lenders. In such plans, the debtor and creditors write up a reorganization strategy that must be approved by shareholders beforehand. A prepackaged plan is intended to expedite Chapter 11 proceedings.
On Jan. 21, the court approved the plan, and it was expected to go into effect within a few days.
We would never have been successful at getting the process completed so quickly if it weren’t done on a prepackaged basis,” Laven said. “I’m grateful that our lenders were cooperative and understood that the opportunity existed to get this done in short order.”
The company was aided in early January when Bank of America committed to a $30 million revolving credit loan for the firm, allowing it to continue operations for the coming weeks.
Latham now will be owned by some of its former senior lenders, with controlling interest held by Littlejohn & Co. of Greenwich, Conn. The 14-year-old private equity firm specializes in mid-sized businesses with revenues of $150 million to $800 million.
Littlejohn, which claims to have made more than $2 billion on approximately $790 million of equity investments, manages three funds with about $1.6 billion of committed capital.
A portion of Latham also will be owned by Laven and other senior managers. But exactly how much share they will have hadn’t been determined by press time.
Previous stockholders lost their interest, including Covington, La.-based distributor PoolCorp, which owned approximately 35 percent of the company.
Laven said no major changes are planned. “We’re continuing to operate the business just as we had in the past,” he explained. “We’re fortunate in that, despite the very difficult economy, our business is actually performing reasonably well. But we had one issue, and really only one issue, and that was our capital structure. This process, in my opinion, addresses that problem and resolves it.”
Latham International has a number of well-known subsidiary firms, including Latham Manufacturing, Pacific Pools, Viking Pools, Coverstar and Kafko Pool Products.