The proposed merger between Vertis Communications and American Color Graphics is back on.
The two printers announced plans to merge last summer with the goal of being able to better address the advertising insert and pre-media services marketplace. That deal fell apart in Sept. because there reportedly wasn‘t enough support for it.
The ensuing eight months haven’t been kind to either company. American Color Graphics sought to defer payments to lenders on one occasion and note holders on another. Vertis recently reported a $327 million loss for 2007 and hired financial advisory firm Lazard Ltd. to help implement a financial restructuring plan.
With the latest deal, the companies plan to expand their footprint, enrich their print capabilities and offer a wide range of premedia and workflow solutions.
As part of the deal, the companies and consenting note holders have entered into restructuring agreements through prepackaged Chap. 11 reorganization plans for each company. If approved, the combined company’s debt obligations would be reduced by approximately $725 million. A formal solicitation of consent for the reorganization plan will be launched soon and the proceedings should conclude in late summer.
Once the deal is complete, Mike DuBose, currently chairman and CEO of Vertis, will become chairman and CEO of the combined company. Steve Dyott, chairman and CEO of American Color, will remain to facilitate the integration of the two companies. American Color will become a wholly owned subsidiary of Vertis.
