A Delaware bankruptcy judge has tentatively approved the sale of Standard Register Co.’s assets to a company run by billionaire businessman Glen Taylor, owner of the NBA’s Minnesota Timberwolves and the Minneapolis Star Tribune newspaper.
Attorneys said Wednesday that Minnesota-based Taylor Corp. submitted a winning bid of $307 million for Standard Register, a century-old printing and marketing company.
Final approval of the sale is subject to resolution of outstanding objections by various creditors and the settlement of a complaint filed against Silver Point by Standard Register’s official creditors committee.
Standard Register filed for bankruptcy protection in March, simultaneously announcing the $275 million buyout agreement with Silver Point, a secured second-lien lender.
Taylor Corp., a similar company to Standard Register, has more than 80 companies in the United States, Canada, Mexico, Britain, France, India, China, Bulgaria and the Philippines. Based in North Mankato, Minn., the company has more than 9,000 employees.
Standard Register, founded in 1912, employs 3,500 workers, including 850 in Dayton.
The Dayton-based printing and marketing company filed for Chapter 11 bankruptcy protection on March 12 and simultaneously announced a $275 million buyout agreement with Silver Point Capital L.P., a Connecticut-based hedge fund.
Silver Point and Taylor Corp. were the only bidders at the auction, according to an objection of the sale filed by the committee of unsecured creditors. Silver Point was initially selected as the winning bidder following the auction, but following negotiations it was announced Taylor increased its bid by $2 million and the hedge fund agreed to allow the Minnesota company to be the top bidder, court documents show.
The committee of unsecured creditors has filed several objections to the sale, including a claim that Silver Point, an already large investor into Standard Register, “chilled the sale process” keeping other potential buyers away making bids for the more than 100 year old Dayton company.
Taylor Corp. produces print and marketing products much like Standard Register. The company has related businesses, so it wouldn’t need to keep Standard Register’s marketing, administrative and managerial functions should it be named as the new owner, said Mark Jacobs, a University of Dayton assistant professor of operations management.
“They can get rid of a lot of that cost structure,” Jacobs said.
Depending on the capacity of its infrastructure, Taylor Corp. also could shut down Standard Register production plants and roll that production into its own existing facilities, he said.
Court documents said 19 potential buyers demonstrated enough interest in Standard Register to execute non-disclosure agreements. The company engaged in protracted, in-depth due diligence with five parties.
Standard Register and Taylor Corp. officials did not respond to requests for comment.
Should Taylor Corp. be named the new owner, Jacobs expects the company to look at Standard Register’s product lines, which include printed forms and communication services for the health care, commercial, financial services and industrial markets.
If Taylor Corp. has other companies doing similar things, it may shut down certain lines of business at Standard Register, and instead sell Taylor products to Standard Register’s customers, he said.
“I think this is a way for Taylor to potentially gain some market share,” Jacobs said.
But it is possible that Standard Register has a greater level of industry expertise than Taylor Corp. In that case, Taylor might look to consolidate operations into Standard Register and the Dayton area, and close down some of its other businesses elsewhere.
“Frankly, there is equal potential that they could look at Standard Register and say we like them, we’re going to keep them and let some of those other people go … and we’re going to hitch our wagon to the Standard Register horse,” Jacobs said.
The Associated Press contributed to this story.
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