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Standard Register Files for Chapter 11

Standard Register Company on March 12 announced that it and its subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States.

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., a private investment firm managing approximately US$8.5 billion in combined assets. The agreement was submitted to the Bankruptcy Court on March 12.

Under the proposed purchase agreement, Standard Register’s assets will be sold for approximately US$275 million plus the assumption of certain liabilities. The sale agreement contemplates a Court-supervised auction process, which is designed to facilitate a competitive sales process.

“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 Morgan Jr., President and CEO, of Standard Register.

Silver Point is an existing secured lender of the company and, in combination with Bank of America, has agreed to extend US$155 million in financing in the form of a debtor-in-possession (DIP) credit facility. Standard Register states the DIP facility should provide ample liquidity to facilitate its sale process and to fund operations.

Standard Register states it believes that the sale to Silver Point Capital will right-size its balance sheet by significantly reducing its outstanding indebtedness and other liabilities. “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,” said Morgan.