Cenveo Ends Quest for NECOctober 2010
STAMFORD, CT—Cenveo Inc. withdrew from the bidding process for National Envelope (NEC), which was sold at auction to Gores Group for $208 million, according to Crain's New York Business. Sun Capital Partners, of Boca Raton, FL, was among the other bidders.
Robert Burton, chairman and CEO of Cenveo, ultimately felt the parameters of the deal were not in the best interest of his company.
"Despite offering the unsecured creditors what we believed to be the highest potential recovery out of all the bids at the auction, it became very clear to us that the debtors and the creditors' committee were requiring significantly more in cash and guarantees from Cenveo than from the other bidders and seeking to saddle Cenveo with unacceptable risk that no other bidders were being asked to bear," noted Burton in a statement.
"Under those circumstances, Cenveo had no interest in acquiring these assets. We feel we can generate substantially higher returns by just executing our game plan with our superior management team and winning in the marketplace rather than by overpaying for any business," he added.
"As I stated on our last conference call, we expect to continue generating strong cash flow and use these funds to pay down debt or make strategic accretive acquisitions that de-leverage our balance sheet and strengthen our product leadership positions. In this environment, we will remain prudent with our resources and will not overextend ourselves to acquire any company when the returns are not acceptable. I am fully committed to be the senior manager of Cenveo until we achieve and exceed our long-term financial and stock price goals."