Illinois company offers $20.8M for Salem plant

By DON SHILLING

VINDICATOR BUSINESS EDITOR

YOUNGSTOWN — An Illinois company is offering $20.8 million for Blackhawk Automotive Plastics, which is expected to kick off a bankruptcy court auction for the Salem company.

Blackhawk will ask at a court hearing Friday in Youngstown that Flex-N-Gate Corp. be named the lead bidder in such an auction.

Blackhawk employs 1,500 at three plants, including 600 in Salem. It makes plastic parts for vehicles and once was part of Worthington Custom Plastics.

Blackhawk filed for bankruptcy protection in October. As part of financing arrangements, lenders required Blackhawk to market the business as a continuing operation.

The company said in court papers that 15 potential buyers submitted offers. After negotiations, Blackhawk officers decided that Flex-N-Gate’s was the best bid.

Blackhawk has proposed that an auction be conducted at a Detroit law firm March 3 in which the first bidder must outbid Flex-N-Gate’s offer by at least $500,000. The following bids must increase by at least $100,000.

A court hearing would be held March 5 to confirm the winning bid.

The motion to make Flex-N-Gate the lead bidder calls for Blackhawk to pay the Illinois company $400,000 if it is outbid. Bankruptcy law allows lead bidders to receive a break-up fee in exchange for being the first company to start the bidding.

Flex-N-Gate makes metal and plastic parts for vehicles. It ranks No. 58 on Automotive News’ list of the top 150 auto suppliers in North America with estimated sales of $889 million in 2006.

In 2001, Flex-N-Gate bought Ventra Group Inc., a Canadian company that makes hinges, latches and other parts, Plastic News said. Flex-N-Gate also has a pending deal to buy a Milan, Mich., injection molding and blow molding plant from Ford Motor Co.

Blackhawk makes parts for automakers such as General Motors and Ford and suppliers such as Delphi Corp. and Lear Corp. Blackhawk had $136 million in sales last year.

Blackhawk said it filed for bankruptcy protection after its vendors stopped extending the company credit.

shilling@vindy.com