Norwalk purchase still on
By Gary Evans and Joan Gunin -- Furniture Today, August 25, 2008
NORWALK, Ohio — The investment firms of IRG Capital Group and Blackbird Capital Partners renewed their pledge to purchase the assets of Norwalk Furniture Corp. by signing a revised letter of intent last week.
The revised letter of intent was negotiated after the initial letter of intent expired on Aug. 15. The investors have since acknowledged that more time will be needed than originally projected to complete the required due diligence.
“IRG Capital Group and Blackbird Capital remain committed to growing this company and positioning it for long-term stability,” said Norwalk Chairman Jim Gerken. “We simply underestimated the time it will take to complete the transaction purchase.”
IRG and Blackbird signed the initial letter of intent on August 4, with an aggressive closing date anticipated 10 days later, on August 15. Terms of the revised letter of intent include most of the same terms and conditions as the original proposal, including a $2-million, low-interest state loan facilitated by the state of Ohio. A matching loan also was provided by Fulton, Miss., and the Itawamba County Development Council in Mississippi.
Norwalk Furniture continues its operations and order-taking as it works to finalize its sale. The proposed sale came after Norwalk's lender, Comerica, called in an $11 million loan, forcing the manufacturer to close briefly.
Chuck Rowe, the IRG manager who was to act as interim chief restructuring officer, will not continue in that role but will remain on the restructuring effort as a consultant. A new chief restructuring officer is expected to be named in the near future.
A story that ran Aug. 17 in the Norwalk Reflector newspaper has indicated that investors had backed out of the deal to acquire the 106-year-old upholstery maker. The story, later revised, was based on an e-mail to employees from Norwalk Chairman Gerken and his cousin, Bill Gerken, vice chairman, that said the deadline for the sale had passed with the agreement unsigned.
IRG Capital is an Akron, Ohio-based investment group that developed a $900 million project in Akron that will include the new international headquarters for Goodyear Tire & Rubber Co. It is owned by Industrial Realty Group of Downey, Calif. IRG's president, Stuart Lichter, has been quoted as saying Norwalk would be a good fit with his organization and could be a strong company.
Of interest to Lichter, according to earlier reports, is an empty manufacturing facility in Tennessee that IRG could convert to other uses.
