Southington’s Thornton & Co. Inc., a plastics distributor and brokerage firm specializing in the distribution of polymer resins, has entered into an asset purchase agreement with Axxom LLC. Thorton will sell substantially all of its business to Axxom for about $3.7 million.
An over-leveraged capital structure and a significant drop in petrochemical prices forced Thornton & Co. Inc. to file for chapter 11 bankruptcy, the plastics distributor said previously. Founded in 1994, Thornton said it had approximately $200 million in sales last year. The company said in a statement that it was unable last month to convince its lenders, led by People’s United Bank, to approve a plan aimed at resolving its financial problems.
“We are gratified with the market interest in investing in TCI and very pleased that Axxom has faith in our ability to once again run a thriving business that allows us to service our valued suppliers and customers”, said Paul Thornton, Thornton’s founder and CEO.
The proposed deal is subject to a bankruptcy auction, where qualified bidders may seek to overbid the Axxom bid. That auction is expected to take place on Nov. 23 at the federal courthouse in Hartford.
If Axxom is the winning bidder, it is expected that Thornton will resume normal-course resin brokerage operations as a part of Axxom.
Under the terms of the asset purchase arrangement, Axxom will acquire the inventory, property, plant and equipment, and intellectual property assets of Thornton for $3.7 million (inclusive of $1 million from Thornton management) plus an “earn-out” provision for the benefit of the Chapter 11 estate. The company’s accounts receivable and other litigation assets will not be acquired by Axxom under the terms of the purchase arrangement. The initial minimum overbid amount is $175,000.
