North Mankato, MN-based conglomerate Taylor Corp. may be the largest cataloger you’ve never heard of. A specialty printing company, Taylor also has a stable of catalogs that includes stationery and forms titles Paper Direct and Current and human resources products book G. Neil. And if its offer to purchase the assets of New Hartford, CT-based Executive Greetings is accepted by the bankruptcy court — bids were due Feb. 16, after this issue went to press — Taylor stands to get larger still.
On Dec. 18, Taylor agreed to buy the assets of Executive Greetings for $53 million, pending a Section 363 auction. New York-based SSG Capital Advisors is advising Executive Greetings in the deal. A holding company whose 15 forms, labels, and stationery catalogs include Baldwin Cooke, HR Direct, and U.S. Diary, Executive Greetings filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Connecticut on Dec. 29.
In its bankruptcy filing, Executive Greetings listed $113.5 million in liabilities and $50 million-$100 million in assets. In 2002 it had sales of $88 million. The company blames its financial woes largely on the debt resulting from its 1999 leveraged buyout with San Francisco-based Berhman Capital.
Calls to the privately held Taylor were unreturned at press time, but industry observers agree that Taylor is hungry for more deals. “Taylor is definitely on an acquisition binge,” says Craig Battle, managing director of Princeton, NJ-based investment firm Tucker Alexander. “They are a huge private company, and the Executive Greetings business is a great fit for them in the paper products,” he says.
Taylor is still fresh off its January acquisition of the greeting cards business of Yonkers, NY-based V.W. Eimicke Associates. It acquired G. Neil last May, and Current and Paper Direct in 1998.
But its acquisition of Executive Greetings is hardly a done deal. Taylor is the “stalking horse” bidder in the 363 auction, which means that it has set the bar with its $53 million bid. Other companies or investors can still outbid Taylor, but their initial bid must exceed Taylor’s by at least $1.825 million; subsequent bids must exceed the previous one by $500,000.
“The stalking horse campaign is a pretty tricky process,” Battle says. But “Taylor has done the work and the due diligence and can survive in a bidding process.”
Indeed, Taylor is establishing itself a survivor in a consolidating industry, says Stephen F. Oakes, former vice president of acquisitions and corporate development for Executive Greetings who is now managing director of New York-based investment bank Bentley Associates. “They have the capital and the courage to make these deals work.”