Universal Building Products Inc., a Westminster-based maker of concrete and other construction products, has closed down and filed for bankruptcy protection with a Los Angeles-based private equity firm first in line to take over its assets.
The privately held company, which also operates under the Don De Cristo Concrete Accessories Inc. name, filed for Chapter 11 bankruptcy protection earlier this month, along with four affiliates.
Universal owes lenders more than $40 million, according to court filings made in bankruptcy court in Delaware. The company lost more than $55 million in the past two years, according to the filing.
As part of the bankruptcy proceedings, Universal ceased all operations except for at two affiliates, Form-Co. Inc. and Accubrace Inc., Chief Executive Jeff Church said in a letter to customers.
The company had 87 workers at the time of the bankruptcy filing.
Universal has a long manufacturing presence in Orange County. Its facilities include a 102,000-square-foot building it leases in Westminster, and another site in Illinois that it’s looking to close.
Universal’s sales and manufacturing operations have been in Westminster for about a decade. Prior to that, the company was in the Irvine Spectrum for close to 20 years.
Universal’s current ownership was formed in 2006 through a combination of Universal Form Clamp and Don De Cristo, known for making scaffolding, hard hats and other construction gear.
The combined company billed itself as a one-stop source for the concrete industry, serving homebuilders and construction companies. It had been one of the largest privately owned U.S. concrete products makers.
Hit by Downturn
Universal’s been hit hard by the downturn in the real estate market and subsequent falloff in construction work.
In 2007, near the peak of the market, the company posted yearly revenue of $146 million and was profitable.
By last year, it had $80 million in revenue and was bleeding money. Universal lost $28 million in 2009, Chief Financial Officer Gregory Waller said in a court filing.
Despite reworking loans several times in the past year, Universal defaulted on parts of its debt earlier this year.
At the time of its bankruptcy filing, Universal owed $40.3 million under a $106 million credit line struck in 2006. The remaining balance is believed to be more than the worth of the company’s remaining assets, Universal officials said in court filings.
The company had sought potential buyers for the past four months.
Oaktree Capital Management LLC, a Los Angeles-based private equity firm, appears to have the inside track on buying Universal’s assets.
An affiliate of Oaktree bought Universal’s secured debt in July for undisclosed terms. It has pressed for bankruptcy, along with a quick sale of the company’s assets through a court-overseen auction.
The firm has agreed to provide Universal $6 million to operate in the short term.
Oaktree plans to pledge $25 million in debt it’s owed in exchange for the assets of the company in what’s known as a credit bid.
The firm also is serving as a stalking horse bidder at the auction, planned for next month. Stalking horse bidders are selected by bankrupt companies to make an opening bid on assets and ward off lowball offers.
Under the auction terms, other bids would have to be at least $250,000 higher than Oaktree’s $25 million bid, and be in cash.
Oaktree manages close to $75 billion in assets, according to its website. It’s made big investments in distressed home loans and homebuilders in recent weeks.
Oaktree is a 42% shareholder in Alliance HealthCare Services Inc., a Newport Beach-based provider of medical scanning and cancer treatment services.
