SUN CAPITAL AFFILIATE OFFERS TO BUY BMK ASSETS

STEPHANIE LOUGHRAN

BOCA RATON, Fla. -- An affiliate of investment firm Sun Capital Partners here last week said it agreed to acquire the assets of BMK, a distributor of general merchandise that filed for bankruptcy protection in December, for $55 million in cash and the assumption of certain long-term lease obligations.

Richard Craig, chief executive officer of BMK, City of Commerce, Calif., told SN that the company needed to be recapitalized and restructured after a string of acquisitions left it with a heavy debt load. Craig said BMK would collapse its west, central and south divisions into one structure to make the company more efficient.

Craig told SN that while BMK had positive earnings before interest, taxes, depreciation and amortization, the company was "sorely" in need of recapitalization.

Jason Neimark, vice president, Sun Capital Partners, told SN that the company invested in BMK because of its position as a market leader and its strong, experienced management team.

"BMK has good franchise value, a large installed customer base, high barriers to entry, and there's a lot of growth opportunity," he said.

Sun Capital is being recommended as the "stalking horse," which would provide it with certain rights that other potential bidders for BMK would not have, he said.

The U.S. Bankruptcy Court must approve the sale.