William Ryberg of the Register is reporting today that Cresco-based Featherlite, Inc. has been sold to an investment company in Ohio for $79.5 million. My understanding is that, following the finalization of the sale, the company will then be re-sold to a group which includes Featherlite's current chairman, executive VP and yet another investment company. Featherlite currently employs 1010 workers in Cresco and Shenandoah.
Let's see if I can simplify that a step further. Featherlite, currently a publicly traded company (shares are currently trading at $4.25, get yours today (see update)), is being sold to an investment company, who will then re-sell the company back to its present management.
Here's my bold prediction: the current management team at Featherlite already knows exactly what they're going to do to eliminate the $29.1 million in debt the existing company has run up. But they're going to saber-rattle and tell Gov. Vilsack and IDED that they're looking at new manufacturing options outside of Iowa. The state will offer an aid package, almost certainly more than $5 million, possibly as high as $20. At that point, New Featherlite (for lack of a better name) will either:
a) Take the offer and stay put, paying off as much as two thirds of their "new" company's debt in the process, or
b) Drive their RV's off into the sunset, citing decreasing market demand, etc, and go somewhere where making RV's is a better investment.
The deal becomes final on October 31, so I'm expecting most of this to play out in November. You heard it here first.
UPDATES: Since the announcement, Featherlite's stock has ballooned from $4.25 to $6.33/share. I'm not sure if that has anything to do with my blog being listed in the "Blog Posts" section on their Google Finance page.