National Envelope Corp., the largest closely held envelope maker in the U.S., won court permission to sell virtually all its assets for about $208 million to an affiliate of the private-equity firm Gores Group LLC.
U.S. Bankruptcy Judge Peter J. Walsh in Wilmington, Delaware, said today he will approve the sale.
The company, based in Uniondale, New York, held a “spirited” 15-hour auction Aug. 20 to determine the best offer, at which the sale price rose by “more than $50 million,” Josef S. Athanas, a company lawyer, told Walsh.
Gores was the lead bidder, with a beginning offer of $134.5 million. Also bidding were affiliates of Cenveo Inc., National Envelope’s largest competitor, based in Stamford, Connecticut, and the private-equity firm Sun Capital Partners Inc., based in Boca Raton, Florida.
Gores won with an offer of about $149.9 million in cash, the assumption of about $20 million in debt the company owes to International Paper Co. and a $37.7 million note, Athanas told the judge.
“We are very pleased that this was done in an amicable manner and are looking forward to working with Gores,” Mark Samson, chief restructuring officer at National Envelope, said in an interview after the hearing.
Jordan Katz, a spokesman for Gores, declined to comment since the sale hasn’t yet closed, which is expected to take place by Sept. 7.
National Envelope filed for bankruptcy protection June 10, listing assets and debt of as much as $500 million each. The company said the recession and increased use of e-mail cut sales, leading to more than three years of losses.
The envelope maker has 14 factories across the U.S. and about 3,390 employees, according to court filings. The company, with 21 percent of the $3.7 billion North American envelope market in 2008, produces about 37 billion envelopes a year.
The lead case is In re NEC Holdings Corp., 10-11890, U.S. Bankruptcy Court, District of Delaware (Wilmington).