Toilet seat maker pitching potential buyers as shutdown looms
by Ted Carter
Published: March 21,2014
A bankrupt toilet seat maker, which a dozen years ago was Columbus’ largest manufacturing employer, has told workers it will close at the end of April if it does not find a buyer by then.
But that date announced by Sanderson Plumbing Products may not be as firm as it sounds, said Joe Max Higgins, CEO of the Golden Triangle Development Link, the economic development entity for Columbus, Starkville and the rest of the Triangle region.
The notice to workers is part of federal requirement under the Clinton-era plant closing law. “I think April 29 represents the 60-day notice,” Higgins said of the notice issued Sanderson Plumbing Products, which filed for Chapter 11 bankruptcy protection on Oct. 30.
“I think a lot will be driven by the lender,” Higgins added.
Sanderson Plumbing has two main lenders — the Mississippi Development Authority (MDA), which has an approximate $1.5 million first lien on the company’s 360,000-square-foot building, and New Orleans-based BizCapital BIDCO II LLC, which has a $1.9 million first lien on the plant’s equipment, inventory, patents and other assets, bankruptcy court documents show.
The MDA also has an $800,000 second lien on equipment and other assets, according to the court filings.
The MDA and Small Business Administration-backed loan from BizCapital came as part of a purchase of the company in 2012 by a group of Sanderson executives led by Tom Whitaker, Sanderson’s current CEO.
In the two years since, big box retail customers such as HomeDepot and Walmart have refused to pay higher prices to accommodate increased costs Sanderson incurred in making the toilet seats and in importing foreign-made seats for U.S. distribution, according to Higgins.
“The lender has to understand the market conditions,” Higgins said.
The more time allowed the more likely a buyer can be found, he added.
Current owner Beneke Magnolia and CEO Whitaker said nearly 100 companies discussed a potential buy the week before last, The Columbus Commercial Dispatch reported this week. The newspaper noted Whitaker said an auction is a possibility if no buyer comes forward.
A recently issued sales announcement said Sanderson Plumbing wants a buyer for both the Columbus and Butler, Ala., plants. The Butler plant, which produced woodflour plastic, closed two years ago.
The owners have hired Heritage Equity Partners of Easton, Md., to seek the sale of its business or assets. Fred Cross, a managing director at Heritage Equity, called the company “an excellent opportunity to acquire an established manufacturing company with a deep history” and a substantial manufacturing capacity
Higgins said he has had contact with companies and investors who have previously encouraged him to let them know when he sees a problem company.
“We think the building is marketable,” he said of the plant situated on 30 acres at 2218 Tuffy Lane.
“The building has got rail siding and redundant electricity,” both strong selling points, Higgins noted.
Rail assets also include service from four Class One lines and a pair of short lines, he added.
“Where this plant is located is rail central.”
Some of the machinery has the potential to be converted to uses other than making toilet seats, according to Higgins.
A shutdown would leave the state as owner of the company’s 360,000 square-foot building.
The MDA said March 11 that Sanderson still owes about $2.225 million on a 2012 loan of $2.5 million.
Sanderson Plumbing Products was founded in Chicago as Findeisen-Kropf in 1883. Henry Beneke Sr. bought the business in 1923, and changed the company name to Beneke. In 1954, Beneke developed a process for molding wood seats out of sawdust by combining the once discarded wood waste with resin under intense heat and pressure. The product was trademarked as “Tuffy.”
At the same time, the company entered plastic manufacturing. Today, manufacturers, including Sanderson, still produce “woodflour”, plastic and vinyl bathroom seats, and Sanderson still sells the Tuffy brand into the plumbing wholesale market under the Beneke logo, and also into the retail market under the Magnolia line.
As recently as 1999, Sanderson produced an average one million toilet seats a month and employed 900 people. Roughly 100,000 toilet seats a month are now made at the Columbus plant.
Sanderson also has a variety of U.S.-based and internationally-based design and utility patents on plumbing implements, connectors and brackets.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- Half century of memories — Christmas on Deer Creek to celebrate 50th anniversary
- Prison-contract task force working in wake of Epps' indictment
- Bryant wants free tuition for students with technical diploma
- Prescott leads field for Conerly Trophy as state's best football player
- (UPDATE) Gov. Bryant: $1.2 billion aluminum plant is a very exciting proposition for the state of Mississippi
- Analyst: KiOR Columbus plant may end up sold as scrap
- County to ask if it can use unspent hurricane recovery money
- BILL CRAWFORD: Bryant’s tax cut won’t stop spending growth
- UM Chancellor Jones: Lymphoma treatment going well