PhillyDeals: Delco-based firm on the hunt for new buys

FXI-Foamex Innovations, the Media-based company that turns petroleum derivatives into the soft stuff that cushions American life, is on the hunt for smaller firms to buy as it branches into the gutter-guard, direct-mail bedding, and burn-treatment industries.

"We are active in the mergers-and-acquisitions arena," in an industry full of regional plants owned by older folks eager to retire, said Chris Pechock, partner at $9-billion-asset buyout fund MatlinPatterson, which led a group of investors that bought FXI-Foamex out of bankruptcy last year.

Pechock, a 1987 Wharton School graduate who still "sneaks over to Abner's for a cheesesteak" when he's in town from his New York office, says he and his partners are "looking constantly to be opportunistic and make good acquisitions" that will boost profits at FXI.

The company employs about 2,100 at plants across North America and outposts in Mexico and Asia. That's down more than half from the former Foamex International's early 2000s peak - after two bankruptcies, a wave of plant shutdowns and sales, and the collapse of auto and home sales that cut demand for Foamex seating.

The closures included the company's former 150-worker, 30-acre Delaware River complex in Eddystone, which Camden Iron & Metal bought for $13 million as the next home for Camden's car-smashing recycler on the road from Philadelphia International Airport to the South Philly stadiums.

One of the most important facilities FXI saved was its research lab, in Eddystone. "They do good stuff," said Michel Hermanns, a burn specialist and retired medical director for Bristol-Myers Squibb, and head of a scientific advisory board for FXI.

Hermanns said the lab gave FXI an unusual capacity to design and clinically test,

for example, compression-of-mattress materials, whose varying thickness helps burn victims avoid "pressure-point ulcers," or what used to be called bedsores.

FXI's first acquisition since its latest reorganization is Monzi Inc., a North Jersey firm that markets gutter guards. FXI chief executive Jack Johnson says Monzi "doubled sales" of FXI's Rain Filter-brand gutter guards (designed to drain water but keep out debris) through deals with Costco and other chains. "We're also talking to Lowe's," Johnson told me.

Pechock has his eye on bigger buys. "For a specialty company like a medical-mattress maker, we could spend $80 million," he said. "For a competitor with half-a-billion dollars in revenue, we could spend maybe $200 million."

FXI has also started marketing mattresses directly to consumers, through QVC, the West Chester-based home-shopping channel.

Johnson is on his second tour as boss of what is now FXI. The former Arco Chemical executive and Safety-Kleen boss left Foamex after a stint in the late 1990s, when he clashed with then-Foamex owner Marshall Cogan.

Cogan, who didn't reply to calls to his New York home or office, pioneered debt-heavy buyouts and mass layoffs in the 1960s as an investment-banking partner of future Citigroup founder Sandy Weill and Securities and Exchange Commission chairman Arthur Levitt.

"They made a lot of wreckage," Johnson said of those serial borrowers. "They didn't care about the debt load. It was a careless way to go."

Since then, "We've really worked hard to change the culture," Johnson told me. "We're optimistic we can get back to making this a billion-dollar company."

Thanks to the many readers who called and wrote to point out, with surprising politeness, that my column Wednesday confused the name of the internationally acclaimed Pine Valley Golf Club in Camden County with its neighbor, Pine Hill.

It's Pine Hill that was bought by developer Donald Trump's organization last fall, at a price golf and real estate sources estimate at $3.5 million to $3.7 million. Eric J. Quinn, general manager of what's now Trump National Golf Club-Philadelphia, won't confirm.

Thanks also to reader Nicholas Young, a proud member of Pine Valley rival Tavistock Country Club, for pointing out that while the Woodcrest Golf Club dates, as I wrote, to 1929, it only became a predominantly Jewish club after World War II.