Diversified Graphics Inc. (“DGI”) (www.diversifiedgraphics.com) is a Minneapolis, Minnesota-based full-service commercial printer that provides premium sheet-fed and variable digital printing solutions and direct-mail marketing services. DGI provides complete print solutions to over 400 customers, including national advertising and graphic design agencies and Fortune 1000 companies. Prior to filing for protection under Chapter 11 of the U.S. Bankruptcy Code, DGI was owned by a group of private equity investors.
The $100+ billion U.S. commercial printing industry is highly fragmented, consisting of over 30,000 companies, the majority of which are small or medium sized businesses that operate one production plant and generate less than $50 million in sales. Since 2002, the U.S. commercial printing industry has experienced strong M&A activity – averaging 50 transactions annually. The industry also has experienced an increase in bankruptcy filings due to customer print-spend rationalization, over-leveraged balance sheets and a slowing U.S. economy.
Prestwick Partners acted as the exclusive financial advisor to Diversified Graphics Inc. Prestwick worked closely with DGI to maximize value for the stakeholders through a sale process that was ultimately conducted pursuant to Section 363 of the U.S. Bankruptcy Code. By identifying a wide array of potential strategic and financial partners, Prestwick was able to lead a process that streamlined DGI’s reorganization efforts as a “debtor-in-possession” under the jurisdiction of the U.S. Bankruptcy Court.