AB Dick Sells To Presstek But Parent Bankrupt

AB Dick Company has signed a purchase agreement to sell the business to Presstek the manufacturer and marketer of high-tech digital imaging solutions for the graphic arts and laser imaging markets.

AB Dick Company has signed an asset purchase agreement to sell the business and assets to Presstek the manufacturer and marketer of high-tech digital imaging solutions for the graphic arts and laser imaging markets.

The transaction, which Presstek has valued at approximately $40 million, is subject to Bankruptcy Court approval under a U.S.

Bankruptcy Code section 363 asset sale Presstek said it intends to operate the AB Dick business as a wholly owned subsidiary based in Niles, Illinois (USA).

Presstek's chief financial officer Moosa E.

Moosa said: "Presstek has also joined with AB Dick's current lender, Key Corporate Capital, Inc., to provide $7 million in debtor-in-possession (DIP) financing, subject to Bankruptcy Court approval, to fund AB Dick's post-petition operating expenses and to meet supplier and employee commitments through the completion of the sale proceedings.

We anticipate that the sale proceedings will be complete in approximately 90 days." Commenting on the strategy behind the acquisition, Presstek president and chief executive officer Edward J.

Marino said: "We view this potential acquisition as a strategic move to expand the long term business opportunities for both Presstek and AB Dick.

The acquisition is designed to extend the distribution capability and channel support for Presstek and to drive an increased level of digital technology and services by leveraging Presstek's industry-leading technology portfolio.

As part of Presstek's market-focused and customer-oriented strategic direction, this acquisition represents a focused investment for future business growth." He added: "Over the past two years, Presstek has refocused and streamlined its organization.

As a result, the company is now on a solid footing and is well positioned to implement a successful integration of the two organizations." AB Dick also announced that it, its parent company, Paragon Corporate Holdings, and some Paragon subsidiaries have filed voluntary petitions for protection from creditors under the American Chapter 11 Bankruptcy Code.

During the Chapter 11 process, AB Dick and all its units will continue to manufacture and deliver products and provide services to customers as usual.

The Chapter 11 filings do not include the AB Dick subsidiary in the United Kingdom, which operates independently of AB Dick (US) and is not directly affected by the filing.

However, the pending sale to Presstek does include the UK operation.

Frank Zaffino, chairman of Paragon, said: "AB Dick has been working to grow and strengthen operations and we had hoped to further develop our business through a strategic transaction outside the bankruptcy process.

Unfortunately, industry conditions have combined to severely pressure cash flow and this filing has become necessary.

The Chapter 11 filing, together with the new financing, should allow AB Dick to operate with no interruption of business and to satisfy continuing obligations to customers while we finalise a sale." He added that the company was looking forward to a smooth and swift conclusion to the sale.

Zaffino said that successful printing companies in the future would need to adopt digital technologies and workflow and that the combined capabilities of Presstek and AB Dick would bring to the market a set of skills, technologies, products and services suited to lead a digital transformation in the in-plant, quick print, and small commercial print markets.

Quentin C.

Baum, managing director of AB Dick UK added that everyone in the UK was very excited about the prospect of becoming a subsidiary of Presstek.

"We have been working with Presstek for just under two years now and it has really helped move our business forward.

We are now dealing with many larger printers as we have access to the Presstek products and the possibilities for the new Vector that we announced at Drupa are enormous.

Their research and development and our knowledge of our customers and markets will lead to new products and services that will ensure that we able to serve our customers for many years to come.".

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