Service Network Inc. (SNI, USA) has been acquired out of dormancy and Chapter 11 bankruptcy by EDAC Technologies (USA; NASDAQ:EDAC; 5251R9N7)

SNI was a leading supplier of remanufacturer of precision grinding equipment, particularly to the bearing industry. The company also offered service and upgrades to Heald equipment, common to most bearing manufacturers.

SNI fell into financial difficulties during the economic downturn as its manufacturing customers not only stopped buying new grinders but also cut back on maintenance and upgrades. By early 2009, the company had fallen into Chapter 11 bankruptcy protection. While it struggled to find enough financing to pull through the recession, its core manufacturing customer base continued to erode. By mid-2009, SNI had essentially ceased operations while a strategic buyer was sought.

EDAC acquired SNI's assets from the bankruptcy court on August 10, 2009.

EDAC paid $775,000 and allocating : $279,000 to inventory, $272,000 to machinery and equipment, $215,000 to accounts receivable, and $9,000 to prepaid expenses.

Beyond the purchase price, EDAC is spending approximately $250,000 to restart SNI's operations.

EDAC has said it will slot SNI under its Gros-Ite Spindles business unit.

SNI has restarted operations at its existing facility, but EDAC plans to move SNI into one of its own existing locations sometime during the first half of 2010.

Dominic Pagano, President and CEO of EDAC, said: "We are pleased with the addition of the SNI precision grinder manufacturing unit into EDAC's group of companies. The new product lines and technologies represent a strategic acquisition that will further broaden our Spindle product line. The company will continue to manufacture precision grinders, and remain an service and parts supplier."