Presstek buys bankrupted A.B. Dick

As the 120-year-old A.B. Dick Company filed for Chapter 11 in the US to protect it from creditors, Presstek announced it entered into an asset purchase agreement through which it will acquire the business and assets of the company for approximately US$40 million. The takeover of the privately owned graphic arts supplier is subject to Bankruptcy Court approval.

Presstek's CFO, Moosa E. Moosa said, "Presstek has joined with A.B.Dick's current lender to provide $7 million in debtor-in-possession (DIP) financing, subject to Bankruptcy Court approval, to fund A.B.Dick's post-petition operating expenses and to meet supplier and employee commitments through the completion of the sale proceedings. It is anticipated the sale will be complete in approximately 90 days.”

The two companies have been working in close cooperation for a number of years with the UK distributor also selling Presstek equipment and supplies. In Australia the Mitchell, NSW-based Grafika Links has been agent for A.B Dick for almost two years during which time it claims to have i nstalled over 30 presses. According to Michael Malone, proprietor, the company is gearing up for a major launch later this year of the new Vector TX 52 press that was debuted at drupa.

“We regard this takeover in a very positive light. Presstek is a very high-tech company with some of its equipment already used in A.B. Dick machines. It [the takeover] will open many doors for us,” he said.

Commenting on the strategy behind the acquisition, Presstek President Edward J. Marino said, "We view this potential acquisition as a strategic move to expand the long term business opportunities for both Presstek and A.B.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 ."

Frank Zaffino, Chairman of Paragon, parent company of A.B. Dick said, “We have 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 DIP financing, should allow A.B.Dick to operate with no interruption of business, and to satisfy ongoing obligations to customers while we finalize a sale. We look forward to a smooth and swift conclusion to the sale process.”

Zaffino said that successful printing companies in the future will need to adopt digital technologies and workflow, and that the combined capabilities of Presstek and A.B.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.

Michael Malone can be contacted on Mmalone@alphalink.com.au