The Standard Register Company announced that it and its subsidiaries have filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
The Company also announced that it is pursuing a sale process and has entered into an acquisition agreement with an affiliate of Silver Point Capital, L.P. Under the proposed agreement, the Company’s assets will be sold for approximately $275 million plus the assumption of certain other liabilities. The sale agreement contemplates a Court-supervised auction process, which is designed to facilitate a competitive sale process. Subject to the results at auction, the closing of the transaction is subject to the satisfaction of usual and customary conditions, including obtaining Court approval and all necessary regulatory consents. The Company believes that this sale will right-size the business’ balance sheet by significantly reducing its outstanding indebtedness and other liabilities to better position the business for long-term growth and profitability in the hands of a capable buyer. Silver Point Capital is a private investment firm managing approximately $8.5 billion.
The Company is supported by its existing secured lenders, including Bank of America, N.A. and Silver Point, who have agreed to extend $155 million in financing in the form of a debtor-in-possession (DIP) credit facility. The DIP facility should provide the Company with ample liquidity to facilitate its sale process and to fund operations. The Company also has filed and expects to obtain approval for various customary motions seeking court authorization to continue to support its business operations during the sale process, including honoring employee wages and benefits in the ordinary course and honoring its customer programs. The Company intends to pay suppliers under normal terms for goods and services provided on or after the filing date of March 12, 2015. The Company appreciates the support of its customers and suppliers and expects to continue its relationships with them in the ordinary course of business.
“Standard Register has a fundamentally stable underlying business with a large, diverse customer base and a strong portfolio of solutions that include integrated communications, product marking and decoration (labels), document management, promotional marketing and technology/professional services, but our ability to invest in growth has been hampered by our debt structure and legacy liabilities,” said Joseph P. Morgan, Jr., president and chief executive officer.
As recently announced, Kevin Carmody, a Practice Leader with McKinsey Recovery & Transformation Services U.S., LLC, has been appointed Chief Restructuring Officer.
Standard Register is trusted by the world’s leading companies to advance their reputations and add value to their operations by aligning communications with corporate brand standards.