Standard Register Files for Bankruptcy
Standard Register, Dayton, Ohio, filed for Chapter 11 bankruptcy, the company announced today. The voluntary petitions were filed in the U.S. Bankruptcy Court for the District of Delaware.
The company also has entered into a $275 million acquisition agreement with private investment firm Silver Point Capital L.P. today. Submitted today, the agreement contemplates a court-supervised auction process, which is designed to facilitate a competitive sale process.
Standard Register believes this 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," according to a company press release.
“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 CEO.
“In response to the traditional print market decline, Standard Register repositioned itself as a market focused integrated communications provider where today, the majority of both revenue and profit are being derived.”
The New York Stock Exchange suspended the company last week after it fell below the requirement that a company must maintain an average global market capitalization of at least $15 million over a consecutive 30 trading day period. Standard Register announced it would not appeal and its common shares would be available over the OTC Pink marketplace under SRCT.
Debts include about $184 million in loans from its 2013 acquisition of WorkflowOne LLC, according to The Wall Street Journal [subscription required].
Its existing lenders have agreed to extend $155 million in financing in the form of a debtor-in-possession credit facility, which should provide liquidity to facilitate the sale process and to fund operations, according to Standard Register. It expects to obtain court authorization to continue to support business operation, which includes paying employee wages and benefits. It also expects to pay suppliers under normal terms for goods and services provided today and in the future.
“The Board and management team have conducted a rigorous assessment of all of our strategic options and believe that this process represents the best possible solution for Standard Register," Morgan said. "We are grateful for the support of our lenders and have sufficient financing to fund our operations as we complete a process that should result in greater flexibility for investment in the future. We are thankful to our dedicated employees who continue to work diligently to deliver value and a high level of customer service.”
For more information, visit www.standardregister.com.