May 01, 2002 Northfield, MN
Saying it intends to reorganize by selling �substantially all� its assets to its three largest shareholders, Sheldahl Inc. April 30 filed a petition for voluntary reorganization under Chapter 11 with the U.S. Bankruptcy Court. Sheldahl said Ampersand Venture Capital, Molex Inc., and Morgenthaler Partners intend to acquire the company, which will continue to operate during the bankruptcy. The Northfield, MN-based company said it does not anticipate any residual value for shareholders.
�We believe the transaction is the best alternative to maintain our service to customers, the confidence of our vendors, and to retain as many employees as possible,� said Benoit Pouliquen, president and CEO in a statement. �Over the last year we have successfully reorganized our operations to concentrate on our core Materials and Flex Interconnect businesses. Today�s actions are intended to provide the capital structure to support the future growth of the business.�
Ampersand, Molex, and Morgenthaler will provide $1.5 million of debtor-in-possession, or DIP, financing. Sheldahl anticipates receiving court approval for that financing. Sheldahl chairman and Morgenthaler general partner John Lutsi said the new entity will be sufficiently capitalized to invest in new projects.
Sheldahl is in the process of shuttering closed its Endicott, NY facility (formerly owned by IBM). Sheldahl�s sales were down 21% in 2001, 23% at its Materials and Flex Interconnect division and 13% at its International Flex Technologies division. In the fourth quarter Sheldahl reported a loss before interest, taxes, depreciation, and amortization (EBITA) of $251,000, excluding writeoffs and goodwill. Sheldahl says its expects a slight improvement in Q1.
�The improvement of our financial performance over the last six months in spite of difficult market conditions is a significant achievement,� Pouliquen said. �The fact that our Materials and Flex Interconnect operations have achieved positive operating cash flow in the last two quarters demonstrates the success of our operational restructuring. The restructuring of our balance sheet is the next logical step in our efforts and will allow us to capitalize on future growth opportunities. We are committed to the restructuring of our finances and believe that with the resources of Ampersand, Molex, and Morgenthaler, we will be successful in our efforts.�
