American Color Graphics announces buyout plans

Struggling Brentwood company being bought by Baltimore competitor

Email | Print By Walker Duncan

07-24-2007 10:34 AM — Earlier this month, printing industry publication Graphic Arts Monthly ignited merger rumors for American Color Graphics when it reported that the company had retained a financial advisor.

With a release late yesterday, the Brentwood company confirmed those rumors, announcing that it would be bought by Baltimore-based competitor Vertis Communications

Though no price tag was disclosed as part of the deal, filings with the Securities and Exchange Commission did indicate that ACG’s owners would own “10 percent of the combined company’s common equity and 8 percent of the mezzanine subordinated notes of Vertis Holdings”

Currently Vertis is owned by an investor group with Boston LBO firm Thomas H. Lee Co. and New York’s Evercore Partners at the head.

Steve Dyott, ACG’s CEO, will remain with the combined company to aid the transition and integration of his company, while Vertis CEO Mike DuBose will run the combined entity.

American Color Graphics has struggled in recent years, seeing earnings drop repeatedly. Additionally the company had to resort to announcing retention bonuses back in April in an effort to hold on to its key employees.

Both of the debt-laden companies are hoping the combination will yield more profitable quarters ahead.

Should the merger close, ACG will become a wholly-owned subsidiary of Vertis.