The private equity firm that bought the Amfuel manufacturing company in Magnolia said this week that it is committed to keeping the operation in the Columbia County seat where Amfuel has operated since the end of World War II.
LB Advisors LLC also is adding to the company's 250-person workforce and intends to grow the business, said Russell Belinsky, the firm's managing principal.
The Los Angeles company bought Amfuel, formally known as American Fuel Cell and Coated Fabrics, in a $1.62 million transaction that a U.S. bankruptcy judge in Texas approved in November. The sale closed Nov. 30, Belinsky said.
LB Advisors specializes in distressed properties.
"Essentially, we're a group that does turnarounds for a living," Belinsky said in an interview this week. "We've owned several companies in the industrial space, turned them around, held them anywhere between five and 10 years and then we typically would sell to a strategic buyer."
That isn't the approach LB Advisors is taking with Amfuel, Belinsky said.
"In this case, we have a very long-term view," he said. "We purchased the company. There's no debt on the company. It's debt-free for the first time in probably 10 years or so.
"There's a management team that was brought in to turn around the company -- Len Annaloro, who's the CEO. He's been there a couple of years. We like Len and we're backing him and his management team.
"And we've added some strategy and capital and we intend to grow the business."
The company makes fuel cells and bladders for military and private aircraft. Last year, it was awarded a $10.2 million contract with U.S. Department of Defense to make fuel cells for the Air Force's C-130s. In 2016, it was awarded a $21.7 million contract to make fuel cells for F-16 fighter jets.
Still, it has been a rocky few years for the company, established in 1945 when Firestone Tire and Rubber Co. converted the former Magnolia Cotton Mill into a manufacturing plant for fuel cells and other coated products needed by the military and aerospace industry.
Local investors purchased the plant in 1983 when Firestone appeared ready to close it. A dozen years later, a French company, Zodiac Aerospace, purchased the plant and held on to it 20 years. It sold the plant in 2015 to a Florida company, which flipped it a year later to five Texas oilmen with designs on moving it to Wichita Falls, Texas.
The move didn't happen but bankruptcy did.
"The company was for sale," Belinsky said. "It had been for sale for a year. The brokerage firm that was selling it was a firm out of Philadelphia. We've known them for years and looked at other companies they sold and done business with them. They brought us this opportunity."
Amfuel fit LB Advisors' focus on distressed companies.
Matthias Kleinsasser, a Fort Worth attorney who handled the bankruptcy, said in an Oct. 22 motion asking expedited approval of the sale that the company's "financial position is extremely precarious."
But Belinsky said the company isn't going out of business or moving.
"It's business as usual," he said. "We're committed to Magnolia. I know the previous owners had given mixed signals on that, but we're committed to Magnolia. We think it's a great location. They've got a very skilled and long-standing workforce that does a great job."
Business on 01/04/2019