Global Fastener News

Prominent Fastener Companies Express Interest in DDI

Jason Sandefur

A list of companies potentially interested in bidding on bankrupt Distribution Dynamics Inc. was filed in federal court. Several prominent fastener companies asked for a copy of the hearing notice and auction bid procedures, court records show. Textron, Barnes Group, Fastenal, GE Supply, ITW, Lawson Products, MacLean-Fogg, PennEngineering, Federal Screw Works, MNP Corp., Precision Castparts owned-SPS Technologies, TriMas Corp., W�rth, Endries International, Fastrite Fastener, and Purchased Parts Group all received detailed auction information.
Other companies to receive auction information included Alleghany Technologies, American Industrial Partners, BancBoston Capital, Brookside Capital Partners, Cambridge Capital Partners, CBG Capital, Citigroup Venture Capital, Crescent Electric Supply, Harbour Group Industries, Heartland Industrial Partners, Hughes Supply, Hunt Investment Group, Huron Capital Partners, Industrial Distribution Group, Madison Capital Partners, MSC Industrial Direct, Precision Industries, RFE Investment Partners, Schneider Logistics, Sterling Group, Strategic Distribution, Tangram Partners, W.W. Grainger, and Wesco International.
Some of the companies, including GE Supply and Textron, are owed considerable sums of money by DDI. GE Supply is a secured creditor with $29.85 million in claims. Textron is DDI”s largest unsecured creditor and is owed $587,014, according to court records.
The court will conduct an auction June 18. Bidding will start at $25.85 million and increase in increments of at least $500,000. All bids must be submitted by June 14 and must include a deposit equal to 10% of the bid (no less than $2.5 million), along with specifics on how many DDI employees the bidder intends to retain.
A final hearing granting court approval will be held on June 21.
All companies are competing against Anixter International, which signed a purchase agreement with DDI for $25 million on April 23. Three days later, Eden Prairie, MN-based DDI filed for bankruptcy protection.
If outbid, Anixter will receive a $350,000 fee for its part in the deal.
In May the court ruled that DDI must entertain bids for portions of the company, but the partial bids must collectively add up to more than the amount DDI would receive for selling the company intact in order to be deemed valid. The ruling was a concession to the group of unsecured debtors owed at least $8.4 million by DDI. The group unsuccessfully fought to block a $1.4 million executive compensation package CEO Dominic Polimeni is scheduled to receive once the sale is finalized. Polimeni, who joined DDI in September 2003, was head of Questron when it went bankrupt and was subsequently sold to GE to form GE Supply Logistics.
DDI distributes fasteners and hardware to OEMs. The company has 227 employees and 20 locations in North America, with fiscal 2003 sales of $76 million. Web: distributiondynamics.com �2004 FastenerNews.com