Look Trailers Inc., Middlebury, Ind., this week closed on the purchase of the former Pace American cargo-trailer factory in Middlebury, putting the last cog in place to resurrect the Pace American brand name.
In what can be taken as another signal that northern Indiana’s manufacturing hub is recovering from the recent economic malaise, Look Trailers over the next year or so plans to add 100 people to its 120-member work force to build Pace American and Look cargo and utility trailers in Middlebury and its factories in Utah, Georgia and Arizona.
Look founder and President Matt Arnold told RVBusiness.com that he saw opportunity in bringing back the high-end Pace American brand even as the cargo trailer market was off 5% in 2011 compared to a year earlier.
”This gives us an opportunity grow in Indiana where we were at capacity in our Look factory,” Arnold said. ”And for us as a company — particularly in the other locations where we’ve got additional capacity — we can add the Pace American line and continue to grow.”
According to Statistical Surveys Inc., Look had the greatest percentage market share increase in the cargo trailer segment in 2011.
Two-year-old Look late last year acquired Pace American’s brand names and put in motion the acquisition of the 90,000-square-foot northern Indiana facility after it and four other Pace American factories were closed by Pace American’s owner, Sun Capital Partners Inc., a privately held Florida investment firm.
Look intends to bring back a majority of the Pace American models, including Cargo Sport, Summit, Shadow, Pursuit and Midway brands that were put on the shelf by Sun Capital prior to the shutdown.
Pace American trailers, with MSRPs starting at $1,250, will be a little more upscale than when they were being built by Sun Capital.
”We are taking the product and making it what it was prior to the Sun Capital purchase,” said Marketing Director Tom Holt. ”We are updating the frames and using stronger material so that the trailers will last longer.”
Pace American will operate as a separate division of Look Trailers and will have a separate dealer base, although some Look dealerships are expected to carry Pace American products.
Look began building Pace American products in Middlebury in mid-January while the company was leasing the factory from the bank that took it over when Sun Capital took Pace American into bankruptcy.
Arnold said there is room in the cargo-trailer sector for a higher end unit.
“There are products out there that are as cheap as can be,” Arnold said. “We are going to be building a high quality trailer because customers are realizing that just because it’s real cheap doesn’t mean that it’s a value. That give us an opportunity to build a quality product that will appeal to the marketplace.”
Industrial Opportunity Partners (IOP), a private equity firm based in Evanston, Ill., has surfaced as a “stalking horse” in the sale of assets of Pace American Inc., a cargo trailer manufacturer with plants in five states.
A June 15 “Article 9” auction has been scheduled in Chicago to sell the assets of Pace American, but IOP has submitted a bid in advance of the auction, making it the “stalking horse” in the proposed sale. The value of its bid was not revealed. IOP will become the new owner of Pace American’s assets, unless another firm comes forward and submits a bid of at least $750,000 higher than IOP’s, according to a notice publicizing the sale.
The deadline to submit a bid is noon CST June 11.
The Private Bank and Trust Co., an Illinois-based bank, is Pace American’s lead bank, which is orchestrating the auction to keep Pace American a going concern. In Article 9 sales, lenders typically do not expect to recoup the total amount owed to them, but such sales are viewed as the best alternative under the circumstances.
Pace American is headquartered in Middlebury, Ind., and has a plant there as well as in Fitzgerald, Ga., Lebanon, Ore., Hurricane, Utah, and McGregor, Texas.
If its bid prevails, IOP reportedly intends to maintain the Pace American name and keep the management team intact.