Griffin Advises Hetran, Inc., Debtor-in-Possession, on 363 Sale of Assets
Hetran, Inc., a debtor-in-possession, and Global Technology, Inc. (GTI) are based in Orwigsburg, PA. Hetran has over 44 years of experience as a leading designer, engineer and manufacturer of bar and coil cold-finishing machinery. It has commissioned more titanium and super-alloy production machines than any other worldwide producer. The company has a worldwide installed base of approximately 500 machines, including standard machine installations, upgrades and major machine enhancements. Hetran’s extensive product line includes machines for bar-to-bar, coil-to-bar and coil-to-coil conversion of round black products (raw bar stock) to cold finished bright products. These machines are generally sold to customers including steel mills and processing companies that supply a variety of industries.
Although the use of the Hetran’s machines remains strong today, beginning in 2012, the company experienced significant financial constraints driven by (1) the launch of new products without final design, leading to production delays and subsequent cost overruns; (2) U.S. Customs legal claims, resulting from the sale of a machine to a customer who was determined to be headquartered in Iran, slowing orders considerably in 2012 through 2014; (3) lack of strategic focus on high margin spares, repairs and maintenance business; and (4) significant reduction in working capital necessary to accept new orders.
Griffin was engaged by the Debtor pre-petition for the purpose of marketing its business as a going concern and the real property, which was owned by GTI and utilized by the Debtor as its base of operations. Pursuant to the engagement, and as a result of Griffin’s efforts, Big B Manufacturing was selected as the buyer of substantially all of the assets of Hetran and GTI. On February 11, 2016, Big B closed on the purchase of the assets of GTI. The Debtor filed a Chapter 11 bankruptcy proceeding with the intention of pursuing a sale of a substantial portion of its assets pursuant to Section 363 of the Bankruptcy Code. Griffin was engaged by the Debtor as its exclusive investment banker, and Griffin ran an auction process, with Big B as the court-appointed Stalking Horse bidder. Griffin administered the Section 363 sale process and auction, but the Stalking Horse bid was deemed the highest and best bid, which resulted in the sale of the assets of Hetran to Big B Manufacturing. The sale closed on June 17, 2016.
For more information on this transaction, please contact Griffin’s Thomas G. Whalen, Senior Managing Director, at 610.205.6115, Glenn S. Bernabeo, Senior Managing Director, at 610.205.6034 or R. Patrick Wood, Senior Vice President, at 610.478.2110.