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PermaGrain Products acquired in Bankruptcy Sale

PermaGrain-Gammapar2

PHILADELPHIA, PA – August 2003 – The Mirus Special Situations Group has advised PermaGrain Products and its creditors on the sale of its Armstone product line to an investor group.  PermaGrain had been the industry leader in engineered hardwood plank and parquet flooring for over 20 years and was a pioneer in the development of acrylic-impregnated flooring products.  Permagrain however experienced operational challenges following its acquisition of Armstrong’s aggregate flooring products (“Armstone”) with operations in Knoxville, Tennessee.

Unable to invest in new equipment due to an economic downturn, the Armstone division continued to manufacture flooring products at negative gross margins, financed by a working capital line of credit. By the time the Company’s bank notified the Company of a default, the Armstone division had already generated losses in excess of $2 million, which bankrupted the Company. Mirus was retained by Permagrain Products to find a buyer for the business, and successfully negotiated sales of the Tennessee operations of Armstone to an investor group after selling the Karthaus, PA, operations to Gammapar.

About the Mirus Special Situations Group

Mirus  provides investment banking solutions to corporate clients in distress, including divestitures, restructurings, and bankruptcy sales. Since 1987, Mirus has provided corporate finance advisory services  to clients in technology, business services, manufacturing, consumer products, health care, and the resort & hospitality industry. For additional information, visit www.merger.com.

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