Workflow Management to get new credit facility as part of buyout

By Sara Rosenberg

New York, Feb. 2 - Workflow Management Inc. will get a new credit facility as part of its acquisition by Perseus LLC and The Renaissance Group LLC for $4.87 per share, a company spokesman told Prospect News.

"We currently have about $150 million in debt outstanding and we're doing a complete recapitalization," the spokesman added.

The company has received and executed commitment letters from National City Bank, Toronto Dominion Investments Inc. and Perseus LLC to finance the transaction, according to an 8-K filed with the Securities and Exchange Commission Monday.

"The board of directors explored numerous alternatives to address our credit facility obligations that mature in 2004, including a strategic sale, high-yield debt offering and a variety of alternative financing scenarios. After considering these alternatives carefully, and after conducting a comprehensive auction process that resulted in Perseus and Renaissance submitting the highest offer to purchase the company, the board concluded that the opportunity presented by Perseus and Renaissance is in the best interests of our stockholders," said Gerald F. Mahoney, chairman of the board, in a company news release.

The transaction, which is expected to close no later than April 4, is subject to the approval of stockholders and the satisfaction of various closing conditions, including a financing condition and a limitation on net debt at closing.

Workflow has also amended its existing credit facility gaining lender consent for the transaction, providing limited interest rate relief, deferring some fees and warrant vesting, and providing for the waiver of some financial covenant defaults caused by the recent Chapter 11 bankruptcy filing by one of the company's largest customers, KB Toys Inc., which owes the company about $5 million.

Workflow Management is a Palm Beach, Fla., provider of end-to-end print solutions.

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