MEDIA, Pa. (June 30, 2009)—A now financially solvent Foamex International Inc. has emerged from bankruptcy as a privately held company with new owners and a new name, FXI-Foamex Innovations.
MatlinPatterson Global Opportunities Partners III L.P. and Black Diamond Capital Management L.L.C. completed the purchase of the large polyurethane foam products maker June 12, allowing the company to emerge from Chapter 11 protection, and renamed the business three days later.
The same management team, headed by President and CEO Jack Johnson, that had been in place when the firm entered bankruptcy proceedings in late February will stay at the helm of FXI. The company's work force of about 2,100 will remain intact, Johnson said.
FXI will retain its current business lines and continue to operate in a diverse market that includes aerospace, office equipment, home furnishings, industrial, personal and health care, electronics, and transportation.
Both MatlinPatterson and Black Diamond were involved in the business as holders of FXI loans before the company filed for bankruptcy.
FXI is now debt free, Johnson pointed out, and as a private entity it no longer will be the only public company in the U.S. foam arena, with most of its innovations on public display and available for prime competitors to view.
“Now they won't have ready access to what we're doing,” he said. “That's more valuable to us than anything. We have the technology and (almost 200) patents. They don't.”
The firm also will be more agile and more responsive to its customers' needs under the new set-up, he said.
In addition, the Media-based business can save itself about $2 million annually as a private entity by not having to file reports with the Security and Exchange Commission and other governmental agencies, Johnson said.
FXI went into bankruptcy primarily because of excess debt, not the poor economy, he said. “It was about getting our balance sheet fixed. The company always had too much debt so we're fortunate to have a strong balance sheet today.”
That debt not only caused FXI to enter bankruptcy twice in four years, but was the chief reason the firm closed seven plants and laid off more than 2,500 in that span. It also sold two businesses.
The company's focus will be people, innovation and growth, he said, adding that “we kept our best people Ã they're dedicated and talented.”
He expects the company will now move into a growth mode with a number of new products. FXI also is looking to pursue new business opportunities in other sectors, but he did not say what they were.
“The hallmark of our organization has always been our ability to look ahead, envision opportunity and imagine the solution that gets us there,” according to Johnson.
The executive said the company is now “better positioned than ever as a more nimble company poised for future growth.”
Johnson said the firm has a top-notch team of scientists, has one of the most efficient manufacturing and distribution networks in the industry, and has invented or perfected many of the technologies currently available on the foam market.