Taylor Corp. has related businesses, so it wouldn’t need to keep Standard Register’s marketing, administrative and managerial functions should it be named as the new owner, said Mark Jacobs, a University of Dayton assistant professor of operations management.
“They can get rid of a lot of that cost structure,” Jacobs said.
Depending on the capacity of its infrastructure, Taylor Corp. also could shut down Standard Register production plants and roll that production into its own existing facilities, he said.
Employees at Standard Register, a fixture in Dayton for more than 100 years, are anxiously awaiting word on who the next owner of the company will be. A hearing is scheduled at 10 a.m. today in the U.S. Bankruptcy Court for the District of Delaware to approve the sale of the company to the successful bidder at Monday’s auction in New York City.
Standard Register, founded in 1912, employs 3,500 workers, including 850 in Dayton.
The Dayton-based printing and marketing company filed for Chapter 11 bankruptcy protection on March 12 and simultaneously announced a $275 million buyout agreement with Silver Point Capital L.P., a Connecticut-based hedge fund.
In a court filing Monday, Standard Register said it had received a bid from a potential strategic buyer that topped the $275 million initial offer from Silver Point. The company did not identify the new suitor or its offer price.
Court documents said 19 potential buyers demonstrated enough interest in Standard Register to execute non-disclosure agreements. The company engaged in protracted, in-depth due diligence with five parties.
Motions to appear at today’s court hearing by attorneys representing Taylor Corp. are “a leading indicator they have won the auction,” said Joe Geraghty, senior managing director for the Dayton office of Conway MacKenzie, which specializes in turnarounds and restructuring.
However, it also could mean Taylor Corp. is disputing the auction outcome if it wasn’t the winner and felt the process wasn’t run fairly, Geraghty said.
Jacobs said a strategic buyer such as Taylor Corp. can afford to pay more than a financial buyer such as Silver Point, which would have to retain Standard Register’s management structure. “It would be more likely that the strategic buyer would emerge as the victor, but that’s no guarantee for sure,” he said.
One of the nation’s largest privately held companies, Taylor Corp. has more than 80 subsidiaries in the U.S., Canada, Mexico, Britain, France, India, China, Bulgaria and the Philippines. Based in North Mankato, Minn., the company has more than 9,000 employees.
Glen Taylor, the billionaire founder of Taylor Corp., also owns the NBA team Minnesota Timberwolves and the Minneapolis Star Tribune newspaper.
Taylor Corp. officials did not respond to requests for comment from the Dayton Daily News.
Should Taylor Corp. be named the new owner, Jacobs expects the company to look at Standard Register’s product lines, which include printed forms and communication services for the health care, commercial, financial services and industrial markets.
If Taylor Corp. has other companies doing similar things, it may shut down certain lines of business at Standard Register, and instead sell Taylor products to Standard Register’s customers, he said.
“I think this is a way for Taylor to potentially gain some market share,” Jacobs said.
But it is possible that Standard Register has a greater level of industry expertise than Taylor Corp. In that case, Taylor might look to consolidate operations into Standard Register and the Dayton area, and close down some of its other businesses elsewhere.
“Frankly, there is equal potential that they could look at Standard Register and say we like them, we’re going to keep them and let some of those other people go … and we’re going to hitch our wagon to the Standard Register horse,” Jacobs said.
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