The private equity firm Atlas Holdings has agreed to acquire LSC Communications in a deal that is expected to close before the end of the year. LSC, the nation’s largest book printer, filed for Chapter 11 bankruptcy protection in April.
In announcing the deal, LSC said that Atlas, with the support of “certain LSC secured creditors,” will acquire all of its assets through a combination of cash and a “credit bid of obligations under the Company’s secured term loan facility and senior secured notes at the direction of the Creditor Group.” Atlas will also assume certain LSC liabilities. Under the agreement, Atlas will also receive certain deal protections as previously authorized: by the court overseeing the bankruptcy proceedings.
In a statement, Thomas J. Quinlan III, LSC chairman, president, and CEO, said that the agreement will permit LSC “to move ahead with an improved balance sheet and a more sustainable capital structure, enabling LSC to continue investing in our business." He added: “We look forward to partnering with Atlas in the weeks ahead to achieve a smooth sale process for our employees, customers, and other stakeholders."
Atlas was formed in 2002, and controls a group of 21 manufacturing and distribution businesses. Those including several companies in the pulp and paper business—Twin Rivers Paper Company, Millar Western, and Marcal—as well as in packaging.
"Over the last two decades, our team at Atlas has developed an intimate knowledge of the printing and paper industries and established a reputation for successfully operating industrial businesses in markets experiencing structural challenges,” said Timothy Fazio, cofounder and managing partner of Atlas Holdings. “We help our companies solidify their position in core markets while remaining agile in dynamic commercial environments. As such, we believe Atlas is the ideal new partner for LSC and the customers they serve."
LSC filed for bankruptcy on April 13, several months after its merger with Quad Graphics was blocked by the Department of Justice. Despite efforts to streamline its operations, the advent of the coronavirus forced the company to seek bankruptcy protection. LSC's cost-cutting program has continued under Chapter 11 and, earlier this month, it announced it was closing its Kendallville, Ind., printing plant.