Business News
Recycled Paper Greetings Announces Agreement to be Acquired by American Greetings Corp.
Wednesday 31. December 2008 - Agreement Includes Significant Debt Restructuring and Continuation of RPG Brand
Recycled Paper Greetings, Inc. (RPG) today announced a definitive agreement with Cleveland-based American Greetings Corp. under which American Greetings would acquire RPG.
The agreement will be subject to regulatory review before being finalized, and it marks the culmination of RPG’s efforts in 2008 to seek restructuring of the company’s debt. As part of the acquisition, American Greetings will provide the needed financing for RPG both to fund future growth initiatives and satisfy the company’s financial obligations.
According to RPG Chief Executive Officer Jude Rake, today’s announced acquisition signals an important new phase in the history of the company.
“American Greetings has indicated they are purchasing RPG because they believe in our long term growth potential based on the special consumer appeal of our products,” said Rake. “This investment by AG is a testament to the creativity of our greeting cards and the outstanding customer service RPG people provide our customers.”
American Greetings Chief Executive Officer Zev Weiss acknowledged his company was attracted to RPG’s witty, funny and fresh content.
“As we looked at RPG, it became clear this was a company that would help us fulfill our mission of providing innovative products and services to meet our consumers’ needs to connect, express and celebrate,” Weiss said. “Today we’re delighted to introduce RPG as the newest member of the American Greetings family.”
The terms of the agreement also involve the restructuring of RPG’s debt under a Chapter 11 process known as a “pre-packaged Chapter 11 reorganization.” Under this process, RPG’s day-to-day operations will continue as usual as American Greetings provides financing for business operations through the Chapter 11 proceedings.
“This acquisition is good news for our company on many fronts,” Rake continues. “American Greetings has indicated they plan to operate RPG on a stand-alone basis to preserve and nurture the uniqueness of the product we deliver to the marketplace. I am confident our new connection to American Greetings will accelerate the growth of RPG by building on the complementary strengths of our two companies.”
American Greetings has indicated Rake and RPG’s senior management team will continue leading the company and RPG will continue to be headquartered in Chicago.