Bankrupt National Envelope sold to competitor, including Fayette County plant
Bankrupt National Envelope agreed on Wednesday to sell its operating assets, including a plant in Fayette County, to competitor Cenveo Inc., the world's largest envelope maker, for $25 million.
Both companies have been affected by the rise of email and online bill paying, reducing demand for paper envelopes.
National Envelope, based in Frisco, Texas, said it reached a definitive agreement with Stamford, Conn.-based Cenveo to sell most of National's assets for $20 million in cash and $5 million in stock. A closing is subject to bankruptcy court approval, closing conditions and is expected to occur by the end of September.
The company's parent, NE Opco Inc., sought Chapter 11 bankruptcy protection on June 10 for the second time in three years. National Envelope employs 400 workers in Upper Tyrone Township, its largest of eight envelope manufacturing plants.
“We're very happy with the outcome of the Chapter 11 proceedings.” Jim Pinto, CEO, stated. “All parties involved worked diligently to see that the company was sold through the bankruptcy process and received the best possible outcome. This sale ensures the best result for all interested stakeholders, including debt holders, owners, creditors, customers and employees.”
Spokesmen for both companies could not be reached for further comment. Spokesmen for United Steelworkers Local 198, which represents workers at the local plant, could not be reached.
Pinto previously blamed a decrease in sales to competition and “a continuing decline in the volume of U.S. mail.” In filings in U.S. Bankruptcy Court in Wilmington, Del., he said “the company's customer base continues to encourage their customers to move towards an electronic flow of information.” Pinto has been CEO since January.
The company continued to operate under bankruptcy protection, but warned employees in June that falling sales and mounting financial problems could result in a sale or closing of all its sites.
The company has other plants in Appleton, Wis.; Industry, Calif.; Ennis, Texas; Frisco, Texas; Exton; Shelbyville, Ky.; Smyrna, Ga.; Westfield, Mass.; Lenexa, Kan.; and Kent, Wash.
Cenveo said it expects that the acquisition of National Envelope will increase sales by about $300 million and operating profit by about $30 million when the combination of the two companies is complete.
National Envelope reduced employment to about 1,600 workers from about 2,200 in the past year, and listed assets and liabilities of as much as $500 million each in its bankruptcy filings. It was “actively seeking a buyer who (will be) committed to the business,” a spokeswoman said.
National Envelope's Chapter 11 bankruptcy in 2010 resulted in an auction of its assets for $208 million to private-equity firm Gores Group LLC of Los Angeles after three years of losses caused by the recession and rising use of the Internet. Among the bidders in that sale was publicly owned Cenveo.
Since then, revenue declined by 20 percent to $427 million in 2012 from the year before, with a loss of $60.1 million compared with $44.1 million in 2011, its filing showed. The company has reported losses every year since 2007.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Silk Road founder Ulbricht gets life term for drug-selling website
- EPA trims ethanol increase in gasoline
- Overhaul possible for West Mifflin’s Century III Mall
- Chevron settles fatal shale well fire lawsuit, state claims for nearly $6M
- No end in sight for casino market saturation in northeastern U.S.
- UPMC offering buyouts to 3,500 employees in cost-cutting move
- Task force to plot ways of easing gas glut in Pennsylvania via pipelines
- How to cover work history gaps
- Murray, Alpha notify West Virginia coal miners of layoffs
- Tight supply pushes home prices higher
- Pitt study suggests health law attracting young to balance insurers’ risks