Belcor Inc. to Acquire Chicago Bag Company

Taking the first step in a proposed transformation from a struggling, loss-plagued oil and gas company to a family of small companies, Belcor Inc. of Irvine, formerly Transierra Exploration Corp., announced Tuesday the acquisition of a small plastic bag maker.

A Belcor spokesman said Aargus Polybag Co. Inc. of Chicago was purchased for a combination of stock and loans worth an estimated $7 million. The deal calls for Aargus owners to receive a million shares of Belcor stock plus $6 million generated from the company’s earnings over the next 12 years. Aargus’ present management, including president Jerome Starr, will continue to operate the company, which had estimated revenues of $8.5 million and pretax earnings of $455,000 in its 1985 fiscal year.

Belcor, as Transierra Exploration, encountered severe difficulties trying to handle the boom-and-bust oil and gas cycle. Although it rode the crest of spiraling oil prices in 1980, its fortunes plunged dramatically with the worldwide oil glut. Losses totaled about $7 million from 1981 through 1984, the most recently available figures, and the company even teetered on the brink of bankruptcy for several months until its lenders agreed to a bail-out plan.

Late last year, Transierra, founded by former real estate salesman M. Douglas Caffey, changed its name to Belcor and embarked on a strategy of “rapid growth through acquisition of companies with expansion potentials,” according to an official company statement.