Newpoint Advisors launches 363 sale process for Upper Midwest foundry

Newpoint Advisors is guiding a court-supervised sale of a century-old Upper Midwest aluminum, brass and bronze foundry and machine shop as the business prepares for Chapter 11 in Illinois. The company plans to keep operating while it seeks a going-concern buyer and financing partners.

Why it matters: - The sale process could preserve a more than 100-year-old industrial manufacturer as a going concern instead of forcing a shutdown or piecemeal liquidation. - The business serves aerospace and defense customers, so a successful deal could protect a supplier with compliance credentials that are difficult to rebuild. - New ownership or financing could stabilize operations after the loss of the company’s largest historical customer.

What happened: - Newpoint Advisors Corporation said it is serving as financial advisor to a vertically integrated aluminum, brass and bronze foundry and machine shop in the Upper Midwest. - The company plans a voluntary Chapter 11 filing in the U.S. Bankruptcy Court for the Central District of Illinois. - Newpoint plans to run a court-supervised sale process under Section 363 of the Bankruptcy Code. - Newpoint is inviting prospective going-concern buyers and financing partners to reach out. - The company expects to continue serving customers and paying employees in the ordinary course during the process.

The details: - The manufacturer has more than 100 years of operating history. - The company produces aluminum, brass and bronze sand castings and machines them in-house from a single large-format facility. - The business serves marine, industrial, agriculture, construction equipment, automotive and aerospace/defense customers. - The workforce includes approximately 30 employees. - The company is AS9100 certified and ITAR registered. - The company has self-certified to CMMC Level 2. - The company also holds Women-Owned Small Business and HUBZone certifications. - The filing follows the wind-down of purchasing by the company’s largest historical customer, a global heavy-equipment manufacturer. - Legacy liabilities blocked an out-of-court sale or partnership. - The company has already been diversifying into defense and industrial customers. - Newpoint said qualified parties will get additional information after signing a nondisclosure agreement.

Between the lines: - A court-supervised process can give buyers cleaner access to assets, contracts and liabilities than a private sale would allow. - The combination of manufacturing capability and compliance certifications may make the business more attractive to strategic buyers in defense and industrial supply chains. - Newpoint’s mention of a possible stalking-horse bidder suggests the process may be structured to set a floor price and keep momentum. - Newpoint also said it is open to parties that want to serve as both DIP lender and buyer.

What's next: - Newpoint expects the sale process to take about 90 days, subject to court approval of bidding procedures. - The company may designate a stalking-horse bidder. - Interested buyers and lenders can contact Newpoint for more information. - The filing and sale process remain subject to court approval and other conditions.